Gold futures hit one-week high
London (Aug 31) Crude oil and wheat prices were lifted this week by intensifying concerns over the Ukraine crisis, while gold advanced as many investors sought shelter from geopolitical tensions. Many commodities also rose on bright economic growth data in the United States, a top consumer of many raw materials including crude oil. The country’s economy expanded at an annual rate of 4.2 percent in the second quarter, up from the prior growth estimate of 4.0 percent, official data showed.
Oil: Global oil prices climbed this week, supported by renewed Russia-Ukraine tensions and stronger-than-expected US economic growth, analysts said. The market also gained ground this week on the back of elevated supply risks linked to simmering tensions in oil producers Iraq and Libya. However, gains were capped by abundant crude oil supplies. Ukraine and the West said on Thursday that Russian troops are actively involved in supporting pro-Kremlin separatists who have been fighting against Kiev’s rule since April.
NATO said at least 1,000 Russian troops were on the ground in east Ukraine but Moscow insisted none of its soldiers were in the country. The United States warned it was considering new sanctions against Russia over the latest development. The standoff between the neighbours, seen as the worst East-West crisis since the end of the Cold War, has sparked fears of a full-fledged conflict. Such a development could cause energy prices to surge as Russia is the world’s number-two oil producer, and Ukraine is a key conduit for Moscow’s gas exports to Europe. By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in October rose to $102.89 a barrel from $102.15 one week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for October stood at $95.40 per barrel compared with $93.11. Grains and soya: Wheat hit a three-week peak Thursday, partly on the back on tensions between key exporters Ukraine and Russia. “The further escalation of the Ukraine-Russia conflict drove the wheat price on the CBOT to a three-week high of $5.79 per bushel,” wrote Commerzbank analysts in a note. By Friday on the Chicago Board of Trade (CBOT), November-dated soybean fell to $10.24 per bushel from $10.42 a week earlier. Maize for delivery in December slid to $3.67 a bushel from $3.71. Wheat for December rose to $5.73 per bushel from $5.62.
Precious metals: The price of gold hit a one-week high at $1,296.65 per ounce on haven demand, dragging sister metal silver to a two-week peak of $19.90. By Friday on the London Bullion Market, the price of gold rose to $1,285.75 per ounce from $1,277.25 a week earlier. Silver eased to $19.47 an ounce from $19.49. On the London Platinum and Palladium Market, platinum gained to $1,424 per ounce from $1,416. Palladium climbed to $898 an ounce from $883.