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Daily Commodities Analysis: Oil and Gold

Published 12/05/2011, 09:01 AM
Updated 04/25/2018, 04:40 AM
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Oil rose in New York amid European efforts to tame a debt crisis that threatens to curb economic growth and weaken demand for commodities. Crude for January delivery climbed as much as 73 cents, or 0.7 percent, to $101.69 a barrel in electronic trading on the New York Mercantile Exchange and was at $101.64 at 7:14 a.m.Singapore time. Italian Prime Minister Mario Monti yesterday announced 30 billion Euros ($40 billion) of austerity and growth measures as he seeks to cut the euro-region’s second-biggest debt. U.S. Treasury Secretary Timothy Geithner arrives in Frankfurt tomorrow to meet with political leaders and central bankers. The European Central Bank has a policy meeting Dec. 8 and a European summit will be held Dec. 9. 


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GOLD

Gold futures rose, capping the biggest weekly advance since October, on speculation that central banks will increase holdings after South Korea bought the precious metal to diversify assets. The Bank of Korea, owner of the world’s eighth-biggest foreign-exchange reserves, purchased 15 metric tons of gold last month, said Lee Jung, the head of the institution’s investment-strategy team. The metal has climbed 22 percent this year on demand for an alternative to stocks, bonds and currencies. “South Korea has huge reserves,” Arne Lohmann Rasmussen, the head of rates, foreign-exchange and commodity strategy at Danske Bank A/S, said in a telephone interview from Copenhagen. “When they are buying gold, it’s supportive for the market.” Gold futures for February delivery climbed 0.7 percent to settle at $1,751.30 an ounce at 1:59 p.m. on the Comex in New York. This week, the price gained 3.7 percent, the most since the period ended Oct. 28. Central banks are expanding reserves for the first time in Purchases of as much as 450 tons in 2011 may be repeated next year as Asian nations and emerging economies diversify reserves, UBS AG said on Nov. 30. In the third quarter, buying by central banks jumped more than sixfold to 148.4 tons, according to the World Gold Council.


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