COMMODITIES : Jump in Oil Prices Spurs Gold, Platinum Futures

Gold and platinum futures prices made strong gains Thursday, partly in response to a rise in the price of crude oil to $16 a barrel for the first time this month, analysts said.

On other markets, stock index futures fell sharply, grain and soybean prices retreated broadly, and livestock and meat futures were mixed.

The sharp increase in energy futures prices on a rumored production cut by the Organization of Petroleum Exporting Countries had inflationary implications that supported precious metals futures, analysts said.

“There’s a view in the market that inflation’s going to be picking up toward the end of the year and that inflation is going to be more of a concern than recession at year-end,” said Fred Demler, metals economist for Drexel Burnham Lambert in New York.

In addition, talk of physical tightness developing in the cash platinum market after two quarters of price weakness helped spur buying of platinum futures, and some of that buying interest spilled over into the gold market, Demler said.

Demler said the gold and platinum markets were oversold and due for a correction to bring futures prices more in line with reality.

Silver futures declined slightly.

On New York’s Commodity Exchange, gold settled $7 to $8.40 higher, with the contract for delivery in April at $444.50 an ounce. Silver was 3.3 cents to 3.7 cents lower, with March at $6.265 an ounce.

Oil Rumors Denied

Platinum settled $16.80 to $18.50 higher on the New York Mercantile Exchange, with April at $498.10.

The rumors of OPEC production cuts that fueled the jump in energy futures on the New York Mercantile Exchange were later denied, but oil prices fell only slightly from their highs of the day.

Market players still expect OPEC nations to take measures aimed at boosting prices, said Bob Baker, an analyst for Prudential-Bache Securities in New York.

West Texas Intermediate crude oil settled 44 cents to 51 cents higher, with April at $16 a barrel.

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