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LONDON, Feb 22: Oil prices endured a volatile run this week as the Iraq crisis and an explosion at a US oil facility kept markets jittery.
Gold prices extended their slide at the start of the week as the dollar showed signs of stabilising and investment funds sold some of their large positions, but the precious metal regained some glitter by the weekend.
The base metals meanwhile pushed higher despite renewed concerns about the strength of the global economy.
GOLD: Gold prices stabilised with the market clawing back losses sustained at the beginning of the week, aided by a weaker US dollar and ongoing worries about the prospects for war in Iraq.
The last two three days, the dollar has started to look vulnerable again, which helped gold prices, that is one of the main factors, said Societe Generale analyst Stephen Briggs.
Gold prices had tumbled on Monday, extending losses to about 10 per cent in just over two weeks, on a slight easing of war fears, a dollar rebound and selling by investment funds.
The subsequent recovery came amid signs that the United States was stepping up preparations for war.
US Defense Secretary Donald Rumsfeld said late Thursday his forces were ready to attack Iraq if US President George W. Bush gave the word.
A new draft resolution by Britain and the United States, giving the international green light for conflict, could be presented at the United Nations as early as Monday, according to British press reports.
Barclays Capital analyst Ingrid Sternby said gold was likely to remain volatile while political uncertainty persists.
By Friday afternoon, the precious metal was trading at $352.30 per ounce on Friday on the London Bullion Market, down from $354.25 the previous week.
SILVER: Silver prices crept higher on investment fund buying.
Silver was trading on the London Bullion Market at $4.64 an ounce on Friday afternoon against $4.53 the previous week.
The industrial metal saw some good fund buying on Thursday which helped it jump higher, said James Moore, an analyst at the specialist website thebulliondesk.com.
While he warned the prices could run into resistance between $4.66-4.70 Moore added that any further gains in gold would undoubtedly give prices a further boost.
PLATINUM AND PALLADIUM: The platinum group metals fell back, with platinum particularly badly affected by heavy speculative sales by investment funds.
Platinum eased on the back of heavy fund selling pushing the industrial metal to test support around $660 again, said Moore.
On Friday, an ounce of platinum stood at $667 on the London Platinum and Palladium Market from $695 the previous week.
Palladium prices traded at $251 per ounce from $256.
BASE METALS: Leading base metals prices managed to eke out gains despite a flurry of weak economic data.
What is surprising is that base metals increased again despite very poor economic data from the US, which should be bad for base metals, but they ignored them and continued going up, said SG Securities analyst Stephen Briggs.
Elsewhere in the complex, three-month nickel prices rallied $460 per ton to $8,860 and three-month zinc prices rose $11 per ton to $795.
Three-month lead prices were unchanged at $483 per ton while three-month tin prices added $95 per ton to $4,695.
OIL: Oil prices gyrated as the threat of a war in Iraq and news of a massive blast at a US oil and gas facility kept traders nervous about the outlook for supplies.
Late on Friday, the price of benchmark Brent North Sea crude oil for April delivery stood at $32.28 a barrel from $32.45 a week earlier.
In New York, April-dated light sweet crude futures traded at $35.45 from $35.36 the previous week.
April-dated US crude oil prices broke above $37 a barrel for the first time in 29 months Wednesday, before the contract expired, as the prospect of a war in Iraq resurfaced.
Oil prices surged on Friday after news of a massive blast at an oil and gas facility off Staten Island in New York rattled traders already nervous about the threat of war in Iraq.
But prices later eased back slightly as traders tried to gauge the likely extent of any disruption to US oil supplies from the explosion.
Also offsetting upward pressure, a report from the US Department of Energy (DOE) showed an unexpected 3.1-million-barrel jump in crude stocks, which are nevertheless near to their lowest level in 27 years.
RUBBER: Rubber prices forged higher on worries about the approach of the wintering season in leading producer countries when production typically drops.
We’ve seen a quite substantial (price) rise this week, on concerns of approaching wintering and strong demand in China, said Symington analyst James Hayworth.
In Kuala Lumpur, the RSS index rose to 3.605 ringgit per kilo from 3.505 the previous week.
COFFEE: Coffee futures rallied on the back of technical factors as traders in New York rolled over their positions into the new May contract.
Nonetheless, Prendergast said the performance of the market had been “pretty tepid”, as the market continued to drift without any clear direction.
SUGAR: Sugar prices climbed sharply higher, hitting a new 20-month peak in the process, bolstered by fresh purchases by speculative funds and industry buyers.
Prices went up on the back of more trade and fund buyings, Czarnikow analyst John Kovaks said.
GRAINS: Grain prices finished the week in mixed form again, with wheat prices creeping higher but maize prices slipping.
COTTON: Cotton prices rose as buyers shifted funds into the new benchmark contract for May delivery.
Prices have moved to higher ground boosted by the rollover period from March to May, which continues to be the main dynamic of the market, said Refco analyst Ann Prendergast.
In New York, the May contract advanced to 57.06 cents a pound from 56.38 the previous week.
The Cotton Outlook Index of physical cotton, the average of the world’s lowest prices, gained to 58.85 cents from 58.70.
WOOL: Australian wool prices were steady at sales this week when buyers were presented with the largest offering since sales resumed in January, the Australian Wool Industries Secretariat (AWIS) reported —AFP
