Gold hits record highs, oil drops amid inflation fears

LONDON, April 16 (AFP): Gold prices hit record highs close to $1,500 this week while oil and base metals fell on expectations that rising global inflation risks will lead to higher interest rates and slower growth. PRECIOUS METALS: Gold reached record highs at the start of the week and continued higher from there to finish with an all- time peak of $1,486.07 an ounce. Investors piled into the safe-haven precious metal amid spikes to global inflation and fresh eurozone debt worries. "Gold hit yet another record high ... and silver charged to another 31-year high as inflation concerns and some fresh safe- haven investment demand pushed the precious metals still higher," said Ian O'Sullivan, analyst at Spread Co trading group. The metal hit its latest highs after China said inflation jumped to a 32-month high, suggesting Beijing's efforts to rein in soaring costs are still falling short. China's consumer price index rose 5.4 per cent year-on-year in March-the fastest pace since July 2008 and well above the government's 2011 target of four per cent-and 5.0 per cent in the first quarter. The US consumer price index rose by 0.5 per cent in March, while India's inflation rate unexpectedly accelerated while eurozone price rises ran at 2.7 per cent last month, way above a 2.0 per cent target. Silver climbed to $42.61 an ounce from $40.22. On the London Platinum and Palladium Market, platinum fell to $1,787 an ounce from $1,803. Palladium dropped to $772 an ounce from $798. OIL: Prices slipped of 30-month highs, weighed down by a sharp inflation rise in China, the world's largest consumer of energy, and predictions of weaker demand. The market also waited on weekend presidential vote in oil exporter Nigeria. Oil prices slumped Tuesday after the International Energy Agency warned that recent high prices had started to hurt global demand for energy. The Paris-based IEA warned that "there are real risks that a sustained $100 dollars a barrel-plus price environment will prove incompatible with the currently expected pace of economic recovery." Traders are particularly concerned that rocketing prices could undermine the delicate recovery in the United States, the world's biggest economy and the largest oil consuming nation. BASE METALS: Tin prices struck another record high at $33,600 a tonne thanks to strong demand but later retreated along with most other base metals on fears that rate tightening by China would cut demand for raw materials. By late Friday on the London Metal Exchange (LME), copper for delivery in three months dropped to $9,390 a tonne from $9,896 a week earlier. Three-month aluminium fell to $2,677 a tonne from $2,712. Three-month lead decreased to $2,640 a tonne from $2,852. Three-month tin slipped to $32,950 a tonne from $33,100. Three-month zinc gained to $2,640 a tonne from $2,526. Three-month nickel declined to $26,081 a tonne from $27,530. GRAINS AND SOYA: Prices retreated. By Friday on the Chicago Board of Trade, maize for delivery in May fell to $7.43 a bushel from $7.68. May-dated soyabean meal-used in animal feed-dropped to $13.30 a bushel from $13.92 a week earlier. Wheat for May declined to $7.41 from $7.97. COFFEE: Coffee prices were mixed. By Friday on LIFFE, Robusta for delivery in July dipped to $2,445 a tonne from $2,463 a week earlier. On NYBOT-ICE, Arabica for May advanced to 287.75 US cents a pound from 275.60 cents. SUGAR: Sugar prices weakened. By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in July stood at 23.10 US cents a pound compared with 26.07 cents for the May contract a week earlier. On LIFFE, the price of a tonne of white sugar for August traded at o627.70 compared with o703.30 for the May contract. RUBBER: Malaysian rubber prices slipped amid a lack of buyers and following the downtrend on the Tokyo Commodity Exchange. The Malaysian Rubber Board's benchmark SMR20 dropped to 515.10 US cents a kilo from 520.45 cents the previous week.