Commodities: Latin American tensions boost oil
Gold fell back from yesterday’s record levels despite the continued weakness of the dollar, as profit takers moved in.
News that South Africa’s power crisis has improved enough for the government to allow mines to increase power consumption from 90% to 95% gave metals traders an excuse to bank profits.
The price of gold for April delivery fell $11.40 to close at $977.10 an ounce, having previously hit an intra-day low of $966.50. On Wednesday the April contract for gold had traded as high as $995.20.
Other metal prices also fell back, with silver doing so after briefly hitting a 27 year high while copper pulled back from an all-time high level of $4.0155 a pound to finish at $3.9145 a pound.
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Crude oil, meanwhile, continued to climb, with the contract for April delivery of light, sweet crude breaking through the $105 barrier to close at $105.47, up 95 cents.
Yesterday’s unexpected fall in US stockpiles of crude underpinned prices, as did simmering tension between Colombia and Ecuador. Both Ecuador and Venezuela have cut diplomatic ties with Colombia in response to a strike by Colombian forces against rebels across the Ecuadorian border.
Long positions held by speculators outnumbered short positions by 91,625 contracts according to data from the US Commodity Futures Trading Commission, a rise of more than 50% on the previous week.
