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Gold surges as oil hits record over 92 { September 2007 } Original Source Link: (May no longer be active)
http://biz.yahoo.com/ap/071026/commodities_review.html?.v=2http://biz.yahoo.com/ap/071026/commodities_review.html?.v=2
AP
Gold Surges As Oil Hits Record Over $92
Friday October 26, 11:21 am ET
By Lauren Villagran, AP Business Writer
Gold, Silver Prices Climb As Oil Reaches Record Level, U.S. Dollar Loses Ground to Euro
NEW YORK (AP) -- Gold surged to its highest level in 27 years on Friday as investors sought refuge from spiking oil prices and the dollar's decline to fresh lows.
It was a day of records in the commodities market.
Oil prices crossed $92 a barrel for the first time. The dollar slumped against the euro, which bought a peak $1.4392. Gold topped $780 an ounce as the metal edged closer to its all-time highs above $850 in 1980.
Energy prices have soared this week as tensions in the Middle East have grown and supply concerns have mounted.
The U.S. on Thursday toughened its sanctions on the Iranian military and state-owned banking systems, punishing a government it accuses of funding terrorism and developing nuclear weapons. The head of Iran's Revolutionary Guards on Friday dismissed the possibility of a U.S. military strike against Iran but said his forces would respond with "an even more decisive strike" if attacked.
The militant rhetoric from both sides has unnerved an energy market already concerned about oil supplies.
Iran is the world's fourth-largest producer of crude; the U.S. is the world's biggest consumer.
A barrel of light, sweet crude oil gained 62 cents to $91.08 a barrel on the New York Mercantile Exchange, after trading as high as $92.22 in overnight electronic trading.
Gasoline futures rose 1.22 cents to $2.248 a gallon, while heating oil futures gained 1.12 cents to $2.4196 a gallon.
Oil supply worries deepened when a U.S. government report issued on Wednesday showed large draws on inventories of crude oil, gasoline and distillates. On Thursday, OPEC's secretary general told the Wall Street Journal that the petroleum cartel was not in discussions to boost production.
Precious metals climbed sharply. December gold prices jumped $10.50 to $781.50 an ounce on the Nymex, the highest since gold surged to a peak $875 an ounce in January 1980. Investors often turn to gold during times of political instability, when the dollar loses strength or when oil prices pop -- and all three elements were in action on Friday.
Jon Nadler, senior analyst with Kitco Bullion Dealers, called the gold market "massively overbought," given that prices have piled on $100 an ounce since Sept. 1. The market is "running on raw emotion and pure speculative fever at this point," he said.
The greenback was mixed against major world currencies after sliding to a low against the euro. In midday trading, the euro bought $1.4388.
Silver futures picked up 31 cents to $14.215 an ounce, while platinum futures rose $9.30 to $1,463 an ounce.
Industrial metals moved higher, bolstered by the dollar's weakness. Nickel, copper, zinc and lead prices rose on the London Metal Exchange.
December copper rose 4.05 cents to $3.5265 a pound on the Nymex.
Elsewhere, agriculture futures advanced on the Chicago Board of Trade. December corn added 5 cents to $3.7125 a bushel. January soybeans rose 8 cents to $10.205 a bushel. Wheat for December delivery rose 5.5 cents to $8.075 a bushel.
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