Gold hit a fresh peak above $1,100 an ounce on Friday but crude oil prices fell as a disappointing rise in US unemployment fuelled concerns about prospects for a recovery in the world’s largest energy consumer.
Gold hit $1,100.90 a troy ounce before easing back to $1,095, up 4.8 per cent this week and gaining 24.7 per cent this year amid hopes for a fresh round of buying by central banks in emerging economies.
Crude oil prices fell by more than $2 with Nymex December West Texas Intermediate down $2.19 to $77.43 a barrel, up 0.6 per cent over the week, while ICE December Brent lost $2.12 at $75.87 a barrel, up 0.9 per cent this week.
Jose Botelho de Vasconcelos, president of Opec, said oil prices were “more or less at an acceptable level” and that crude at $80 a barrel in 2010 would be “reasonable”.
Hussein Allidina, commodity strategist at Morgan Stanley, said further gains for oil prices were likely to be limited as physical demand remained weak and supportive macro-economic factors would start to fade.
Gold: Unstable metal
Interactive timeline charts economic and political events that have driven gold prices from 1900
“A deluge of global liquidity has kept oil prices, along with other risky assets, moving higher since February,” said Mr Allidina. “With the end of [monetary] easing approaching, we envision a harder grind ahead, one where fundamentals will matter more.”
Morgan Stanley expects WTI to average $85 a barrel next year as the market’s fundamentals should improve in 2010 as growth in oil demand resumes.
But Mr Allidina warned that betting on more gains for oil was a “crowded trade” with the speculative net long position in WTI standing at a record high.
The Baltic Dry Index rose 1.7 per cent to 3,393, up 9.3 per cent this week with the global benchmark for freight costs for dry bulk commodities moving higher due to strong Chinese demand for iron ore and coal and congestion outside Australia’s Dalrymple Bay port, the world’s third-largest coal export terminal.
Among the base metals, copper inched up 0.5 per cent over the week to $6,515 a tonne amid ongoing concerns about supply disruptions in Latin America.
