Strong investment demand boosted metals prices again on Monday, with gold rising to a new near 18-year high.
Aluminium also climbed to a 10-year peak, palladium to a fresh 18-month high, zinc a new eight-year high and copper to near its record high of last week.
Gold peaked at $489.75 a troy ounce, before settling at $488.20/$489 in late London trade, up $2.80 from New York’s late quote on Friday.
“We continue to view this rally as being speculatively driven, with fund interest fuelled by market talk of targeting $500 by year-end, continuing macroeconomic and geopolitical concerns, as well as expectations for more central bank buying,” Barclays Capital said.
“Sentiment has improved for all precious metals after positive comments from Johannesburg [gold conference].
“We see investors and speculators returning to markets,” said John Reade, analyst at UBS.
UBS raised its one-month forecast for gold from $440 to $465 a troy ounce and its three-month price to $500. Both figures are in line with the market consensus.
Platinum eased but stayed near its 26-year high at $973 an ounce. Palladium hit $267 an ounce, up $6 from its late quote in New York on Friday.
Crude oil prices gained and UK natural gas jumped to a more than eight-month high as forecasts for colder weather in Europe and the US raised expectations that heating demand will climb.
Rising demand together with production disruption at North Sea gas fields raised fears of supplies failing to meet demand. This pushed spot UK gas prices to a peak of £1.30 a therm, its highest level since March. Higher gas prices will force UK manufacturing costs higher, as well as home heating bills.
Brent crude oil for January delivery climbed 46 cents to close at $55.34 a barrel in London, while January West Texas Intermediate added 49 cents to settle at $57.70 a barrel in trading on the New York Mercantile Exchange.
“The risk is that the market has gone a bit complacent about the weather. If we got a good sharp cold patch, the price could move back to about $60 a barrel,” said Kevin Norrish, analyst at Barclays Capital.
Copper was $2 short of matching its record high of $4,242 a tonne on Friday as the market focused again on the Chinese short position. The metal’s three-month contracts were traded for $4,215 a tonne at the end of open-outcry trading on the London Metal Exchange.
Copper supported aluminium and zinc, which touched fresh highs. Aluminium hit a high of $2,069 a tonne before easing to $2,065 a tonne.
Zinc reached a high of $1,656 a tonne, $19 short of the level it last reached in July 1995.
