Gold and oil prices reach historic heights

Gold prices topped $1,000 for the first time and oil futures rocketed to a record high $111 this week as the dollar plunged to all-time lows against the euro.

Investors dived into commodities as they sought a haven amid fears of a US recession and global economic slowdown. Investment in gold and oil is also seen as a hedge against future rises in inflation. Since the commodities are priced in dollars, a tumbling greenback makes gold and oil cheaper for buyers using stronger currencies, encouraging demand. The euro struck a record-high $1.5688 Friday after US investment giant Bear Stearns announced it was being baled out because of liquidity problems and following weak US consumer confidence data, traders said.

Oil: Oil prices enjoyed another record-breaking run this week as traders sought refuge from turbulent stock markets and the dollar’s downwards plunge. New York’s light sweet crude jumped to a record high 111 dollars per barrel on Thursday. London’s Brent oil hit an historic $108.02 Friday.

Oil has rocketed 90 percent over the past year as the market is driven by tight supplies, geopolitical concerns in key producer nations and strong demand from China and India. Prices have gained about nine percent in value since the start of 2008, accelerating after the OPEC crude exporters’ cartel held output at current levels last week. The Organisation of Petroleum Exporting Countries also on Friday left unchanged its estimate for growth in world oil demand this year. OPEC said while high prices and mild winter weather would brake demand in major industrialized countries, the market for crude would be strong elsewhere. By Friday, New York’s main oil futures contract, light sweet crude for delivery in April, was at $109.30, up from $105.42 a week earlier. Brent North Sea crude for April jumped to $106.59 from $105.42.

Gold: Gold prices soared to a record high $1,007.40 per ounce on Friday as the dollar slumped to record lows versus the euro. Gold has risen by about 17 percent so far this year, underscored also by supply problems in South Africa, the world’s largest producer. Gold has been on an upward trend since the start of January when the yellow metal jumped above $850 per ounce, smashing a 28-year-old record. Global demand for gold is also surging owing to increased jewelery purchases in China and India On the London Bullion Market, gold stood at $1,003.50 per ounce at Friday’s late fixing, up from $972.50 a week earlier. Silver jumped to $21.07 per ounce from $20.22.