Gold, oil pause on path to key highs
Sunday, 11 November 2007
NEW YORK/LONDON, Nov 10 (Reuters): Oil and gold both lost momentum yesterday, as they digested the week's volatility on their respective treks to all-time and 28-year peaks, but supply worries for oil, inflation fears for gold, and dollar weakness should propel both to landmark highs, analysts said.
Base metals shrugged off initial gains on the prospect of less supply from a possible merger between BHP Billiton and Rio Tinto, two of the world's leading metal miners.
Instead, copper tumbled 3 per cent to 12-week lows as signs of softening demand in top metal consumer China and concerns US economic growth may falter weighed on sentiment.
Crude oil prices rose above $96 per barrel, within sight of the $100 psychological milestone, on winter fuel supply worries dollar dip to record lows, and options plays betting oil could strike $100 next week.
"I think the one thing people are continuing to eye is the options expiration," said Eric Wittenauer, analyst at AG Edwards in St. Louis. "I think people would be hesitant to sell into this market."
US crude for December delivery settled up 86 cents at $96.32 a barrel, off earlier highs of $96.68. London Brent crude climbed 39 cents to $93.18.
Loss of North Sea production from storm damage and a diesel refinery outage in Texas raised worries of supply shortages, though were not expected to be as severe as initially feared.
Gold was similarly well-positioned, finishing flat though within sight of 28-year peak hit earlier this week above $840.
Spot gold rose to $838.90 an ounce but was quoted at $832.30/833.10 by 2:15 p.m. (1915 GMT), against $832.10/832.85 in New York late Thursday, on course for the $850 record high reached in January 1980.
"The market is following the dollar and people are waiting for gold to hit $850 an ounce. Sentiment is still bullish as the market expects more cuts in US interest rates and further weakness in the dollar," said Michael Blumenroth, metals trader at Deutsche Bank.
Base metals shrugged off initial gains on the prospect of less supply from a possible merger between BHP Billiton and Rio Tinto, two of the world's leading metal miners.
Instead, copper tumbled 3 per cent to 12-week lows as signs of softening demand in top metal consumer China and concerns US economic growth may falter weighed on sentiment.
Crude oil prices rose above $96 per barrel, within sight of the $100 psychological milestone, on winter fuel supply worries dollar dip to record lows, and options plays betting oil could strike $100 next week.
"I think the one thing people are continuing to eye is the options expiration," said Eric Wittenauer, analyst at AG Edwards in St. Louis. "I think people would be hesitant to sell into this market."
US crude for December delivery settled up 86 cents at $96.32 a barrel, off earlier highs of $96.68. London Brent crude climbed 39 cents to $93.18.
Loss of North Sea production from storm damage and a diesel refinery outage in Texas raised worries of supply shortages, though were not expected to be as severe as initially feared.
Gold was similarly well-positioned, finishing flat though within sight of 28-year peak hit earlier this week above $840.
Spot gold rose to $838.90 an ounce but was quoted at $832.30/833.10 by 2:15 p.m. (1915 GMT), against $832.10/832.85 in New York late Thursday, on course for the $850 record high reached in January 1980.
"The market is following the dollar and people are waiting for gold to hit $850 an ounce. Sentiment is still bullish as the market expects more cuts in US interest rates and further weakness in the dollar," said Michael Blumenroth, metals trader at Deutsche Bank.