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Gold Targets $1,000, Oil Rises

Gold inched closer towards the $1,000 mark on Thursday, helped by strong investor inflows into exchange traded funds, while oil prices staged a recovery ahead of the latest US weekly inventories data.

Gold reached a fresh seven-month high of $985.95 a troy ounce after ending trading in New York on Wednesday at $984, encountering resistance just ahead of its July 2008 high of $987.75, up 1.6 per cent on the day, with strong investor inflows into exchange traded funds making a challenge on the record $1,030.80 set in March look increasingly likely.

Investment inflows into gold exchange traded funds have picked up pace this year. Holdings in the SPDR Gold Trust, the largest physically backed ETF, surpassed the 1,000 tonne mark on Tuesday, and rose further on Wednesday, up 15 tonnes to 1,024 tonnes.

Analysts maintain that a continuation of the strong investor inflows into ETFs make a challenge on the gold's price record $1,030.80 set in March 2008 look increasingly likely.

In energy markets, ICE April Brent rose $1 to $40.53 a barrel while Nymex March West Texas Intermediate also rose 96 cents to $35.58 a barrel.

Policymakers and analysts currently view the front month WTI contract as "disconnected" with the rest of the global oil market due to rising stocks at its delivery point in Cushing, Oklahoma.

Brent dipped closed the $40 a barrel mark for the first time this year on Wednesday and some traders think this level could act as a floor for the market.

US inventories data due out later in the session were expected to show a rise of 3m barrels in crude stocks while gasoline inventories were seen falling 500,000 barrels and distillate stocks (including heating oil) were forecast to drop 1.2m barels, according to a poll of analysts by Reuters.

Refinery utilisation was expected to dip 0.3 per centage points to 81.3 per cent as more refineries undertake seasonal maintenance while others have been cutting back on prodiction due to weak profit margins.

Base metals staged a modest rebound, led by copper which rose 2.3 per cent to $3,311 a tonne in spite of an increase of 2,950 tonnes in London Metal Exchange stocks.

Aluminium gained 1.5 per cent at $1,360 a tonne in spite of a further substantial increase of 30,850 tonnes in LME stocks.

Nickel recovered the $10,000-a-tonne mark, rebounding 3 per cent to $10,025 a tonne while lead added 0.6 per cent at $1,080 a tonne, tin rose 1.4 per cent to $10,900 a tonne and zinc added 1.3 per cent to $1,134 a tonne.

SOURCE: http://www.ft.com/cms/s/0/6f7f5aa4-fe7a-11dd-b19a-000077b07658.html

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