COMMODITIES : Persian Gulf Clash Gives Lift to Gold Futures Prices
Gold futures prices rose Monday on expectations that an outbreak of fighting in the Persian Gulf could drive oil prices and inflation higher, but analysts were skeptical about the chances for a sustained rally.
On other markets, energy futures advanced; most livestock and meat futures declined; grains and soybeans were mixed, and stock index futures rose.
Gold for June delivery settled above $460 an ounce on the Commodity Exchange in New York for the first time this month. But the settlement price of $461.70 was well below the day’s high of $464, an 11-week high.
Silver and platinum also jumped in early trading, but an afternoon selloff pushed their settlement prices below Friday’s final prices.
The prospect that military action between the United States and Iran in the Persian Gulf could disrupt crude oil shipments and drive oil prices higher was seen as a positive factor for the inflation-sensitive metals, analysts said.
But brief skirmishes such as Monday’s U.S. Navy attacks on Iranian oil platforms and military vessels often have an ultimately negative effect on the precious metals, said Craig Sloane, metals analyst in New York for Smith Barney, Harris Upham & Co.
Gold settled $3.20 to $3.80 higher, with the contract for delivery in June at $461.70 an ounce; silver was 2.7 cents to 3.5 cents lower, with May at $6.44 an ounce.
Crude oil futures also fell back on the New York Mercantile Exchange after a morning rally that pushed the contract for May delivery to $18.92, just short of the important $19-a-barrel level.
“The market clearly reacted to the increased tension in the Persian Gulf and the U.S.-Iran clash,” said Andrew Lebow, an analyst in New York with ED&F; Man International Futures Inc.
The setback apparently was motivated partly by technical factors and partly by statements from Saudi Arabia and Kuwait that they would not reduce their production of crude oil unless non-OPEC producers also agreed to cut production, Lebow said.
The Organization of Petroleum Exporting Countries has invited some non-OPEC producers to meet next week to discuss production levels.
West Texas Intermediate crude oil settled 15 cents to 26 cents higher, with contracts for May delivery at $18.52 a barrel. Heating oil was 0.48 cent to 0.83 cent higher, with May at 50.50 cents a gallon, and unleaded gasoline was 0.64 cent to 0.73 cent higher, with May at 53.30 cents a gallon.
Cattle and pork futures were pressured by profit taking on the Chicago Mercantile Exchange.
Soybean futures prices closed substantially higher on the Chicago Board of Trade. Corn also advanced, while wheat futures declined slightly.
Stock index futures advanced on the Chicago Mercantile Exchange, where the contract for June delivery of the Standard & Poor’s 500 index settled 0.45 point higher at 259.25.
