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Bhutto killing drives gold, platinum, oil higher
Reuters
Posted: Thu, 27 Dec 2007
[miningmx.com] -- GOLD hit a one-month high on Thursday as buying picked up after news that Pakistani opposition leader Benazir Bhutto was killed in an attack. Oil and platinum prices also moved higher on the news.
"Certainly it's going to work in gold's favour. Instability in Pakistan is favourable for the market," said James Moore, precious metals analyst at TheBullionDesk.com. "The markets are very thin and people are jittery. Any such news is going to create a larger reaction than you would normally expect to see."
Spot platinum set a new historic peak, tracking gold prices and supported by positive fundamentals, traders said.
Oil moved higher on Thursday alongside gold, which rose after Bhutto was killed in a gun and bomb attack in Rawalpindi.
U.S. light sweet crude for February was 47 cents up at $96.44 a barrel by 1409 GMT, after touching a one-month peak
of $96.54 on Wednesday, within $3.00 of its all-time high of $99.29 reached on Nov. 21. London Brent crude rose 32 cents to $94.26 a barrel.
"I think it's a major factor, gold running does pull crude with it, but I'm not sure for how long," said one oil trader. Oil had surged to one-month highs in the previous session following Turkey's raid on Kurdish guerrilla targets in northern Iraq.
A
weaker dollar after data showing lower-than-expected U.S. durable goods orders in November also supported precious metals.
Spot gold rose as high as $830.05 an ounce, the highest since Nov. 26, and was quoted at $826.70/827.60 at 1437 GMT, against $823.00/824.30 late in New York on Wednesday.
"The jump up we've had in gold has been partly on the back of this news as it's a destabilising factor. And with the bullish mood seen over the past few days, it could drive prices higher," said William Adams, metals analyst at BaseMetals.com.
Police said a suicide bomber fired shots at Bhutto as she was leaving the rally venue in a park before blowing himself up.
Simon Weeks, director of precious metals trading at Bank of Nova Scotia, said Bhutto's news helped the metal, often seen as a safe-haven asset.
"U.S. numbers were dollar negative as well and the U.S. market has seen buying over the Christmas holidays. I would think that $825-$830 should
be enough for now but headlines news items are all being interpreted as bullish at the moment."
Trading volumes in the bullion market were thin as many players were away or keeping their positions light due to year-end holidays, but the outlook remained positive and analysts said they expected gold to advance in the new year.
Gold has gained more than 30 percent this year.
"As investors continue to accumulate gold in their portfolio and equity returns turning to be risky, gold would continue to rise, but may have to struggle again as it reaches the recent highs," said Pradeep Unni, analyst at Vision Commodities.
In other bullion markets, U.S. gold futures rose, with the most active February contract trading up $4.00 at $833.00 from the New York settlement.
Spot platinum rose to a record $1,542.00 an ounce and was last quoted at $1,539/1,543, the level it closed at in New York on Wednesday.
The metal has gained almost 40
percent this year. "The overall fundamentals remain relatively bullish for platinum and there may be further gains ahead in the short-term, with fundamental supply concerns hanging over the market," Standard Bank said in a report.
Supply disruptions at some mines in South Africa, the world's top producer, have resulted in a deficit this year and are likely to leave the market in a deficit again next year.
Aquarius Platinum said on Thursday its Marikana mine had lost 3,000 oz of platinum group metals in industrial action.
Johnson Matthey, the world's top platinum refiner and fabricator, said in November the market would change course in 2007 and see a deficit of 265,000 ounces. It had a surplus of 65,000 ounces in 2006 after seven successive years of deficits.
Spot palladium rose $1 to $361/364 an ounce, while silver rose to $14.73/14.78 an ounce from $14.67/14.72.
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