Independent.co.uk

Oil price surges to all-time high

By Sean O'Grady, Economics Editor
Saturday, 1 March 2008

Crude oil has surged for a fourth day as the feeble dollar and lackluster stock markets increased the appeal of commodities for investors.

Oil and gold prices surged to record highs yesterday as the dollar fell to close to its lowest level ever against the euro.

Gold hit a new high near $980 an ounce, and crude oil set an all-time high of above $103 a barrel - both beating the real-terms peaks reached in 1979-80. Many traders believe that gold at $1,000 an ounce is now well within reach.

Corn and soya beans have also tested new records. New York silver futures, meanwhile, broke the much-anticipated $20-an-ounce level.

Commodities that are traded and denominated in dollars usually move for technical reasons in the opposite direction to the US currency. A falling greenback makes dollar-denominated commodities cheaper for holders of other currencies, though the scale of recent movements has few parallels. Gold is also a traditional hedge against inflation, especially in Asia.

It was a question of dollar weakness rather than commodity strength per se. The dollar fell to the lowest for almost three years against the yen and endured its biggest drop against the euro since September as the markets bet that the Federal Reserve will continue its policy of aggressively cutting rates, making the returns from dollar investments look less attractive. Fed vice-chairman Donald Kohn in effect said last week that economic weakness was a bigger concern than inflation.

Dollar slumps amid the gloom

By Neil Dennis

Published: March 1 2008 02:00 | Last updated: March 1 2008 02:00

The dollar slumped this week after a worsening array of US economic data deepened fears of recession and increased expectations of further aggressive US interest rate cuts.

The US currency fell to record lows against the euro and Swiss franc and multi-year troughs against a number of other currencies.

Tumbling US house prices, falling consumer confidence, weaker-than-expected orders for durable goods, stalling manufacturing, flat economic growth and signs of a weakening labour market drove expectations of lower interest rates.

The dollar sell-off started in earnest on Wednesday - particularly against the euro - after eurozone data supported the view that the European Central Bank would keep rates on hold for some time.

"Markets are probably wisely bracing themselves for further monetary policy divergence between the US and eurozone over the next few months," said Martin van Vliet at ING.

Ben Bernanke, Fed chairman, added fuel to the fire after he promised "timely" action to "provide adequate insurance against downside risks".

What will it take for Americans to INSIST on realistic and complete plans to cure the obvious problems, and GROW. What is the reason NO CANDIDATE features such plans? What is the reason no president and no congress has made realistic changes to avoid these problems for over a generation?

What is the reason?

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Soaring cost of gold causes jewelery market pandemonium

By Ellen Kelleher

Published: March 1 2008 02:00 | Last updated: March 1 2008 02:00

The soaring cost of gold and platinum is causing pandemonium in the UK's jewellery market as retailers and private owners rush to reappraise the value of necklaces, brooches and rings.

Jewellers in London's Hatton Garden - the capital's jewellery quarter - are raising the price of wedding bands on a weekly basis, with less-expensive palladium rings now coming into vogue. And insurers are urging clients to get another assessment of the value of their jewellery collections in response to the rapid rise in the price of precious metals, sparked by investors seeking refuge from volatile stocks.

"The price of platinum has been going up so fast, we're quoting people prices for platinum wedding bands on a Saturday and saying we can't guarantee the same price on Monday.

"Last week, we had to raise the price of all our platinum items by 30 per cent," said Adam Lawrence, a manager at Anthony Gray, a Hatton Garden jeweller.

The rise in prices has made less-expensive palladium wedding rings - which are lighter, but nearly identical in colour to platinum or white gold ones - more popular, London jewellers report.