Gold Advances to Highest Since 1980; Platinum Gains to Record; Oil Climbs Above $98

[Purveyor]

By Claudia Carpenter

Jan. 2 (Bloomberg) -- Gold rose in London to the highest since 1980, extending an unprecedented seven-year advance, as a jump in crude-oil prices increased demand for the metal as a hedge against inflation. Platinum advanced to a record.

Oil climbed above $98 a barrel in New York, 1 percent away from an all-time high. Inflation in the 13-nation euro region in November accelerated to the fastest since 2001. Gold was also buoyed by a weaker dollar against the euro and other currencies, bolstering demand for the metal as an alternative investment.

--
`Bull Run'

Gold will probably average $800 an ounce this year, compared with $697 last year, according to the median estimate of 37 traders, analysts and investors surveyed by Bloomberg last month. Mounting losses in credit markets tied to subprime mortgage loans are spurring demand for alternatives to stocks and bonds. The UBS Bloomberg Constant Maturity Commodity Index of 26 commodities is up 28 percent in a year.

``Expectations are that gold will continue its bull run in the new year because of fundamentals such as higher oil prices,'' said Darren Heathcote, head of trading at Investec Bank (Australia).

--
Gold Fix

``A thousand dollars is very much on everyone's radar,'' Peter McGuire, managing director at Commodity Warrants Australia Ltd., said from Sydney. ``If we talk about inflation times, going back to 1980, to match those sorts of dollars, gold would have to sit at $2,400 an ounce, so it's well under its all-time high.''

[tuckessee]

1. It's going to be an interesting year.

Good luck to all the suckers whose money is in the stock market.

[Lone_Star_Dem]

2. Oil went up 60% in the past year.

The credit crisis.

The housing bubble bursting.

The falling Dollar.

The Manufacturing shift into negatives in December.

Just a few of the reasons why I'm not surprised to see gold going up in the least.

[Javaman]

3. I predicted over a month and a half ago that oil would top $100

2 weeks after the holidays. I was ridiculed for that as being a pessimist. Huh, still less than 2 bucks off, but it all appears as if I may have been correct.

once that door is open, I see a peak of $150 by the summer.

[Tesha]

5. Your oil prediction has come true.

http://www.bloomberg.com/apps/news?pid=20601085&sid=akyeiOc_7qMM&refer=europe

Oil Touches $100 a Barrel on Supply Concern, China's Demand

By Nesa Subrahmaniyan

Jan. 2 (Bloomberg) -- Crude oil rose to $100 a barrel for the first time in New York,
reflecting an industry struggling to find deposits at a time of record demand.

Oil touched $100 today, extending last year's 57 percent rally, boosted by speculation
U.S. stockpiles dropped to a three- year low last week. Unrest in Nigeria, Africa's
largest oil producer, also spurred prices.

Three-figure prices may bring energy costs near the tipping point that will cause
global economic growth to falter. China has more than doubled oil use since New
York crude dropped to this century's low of $16.70 a barrel on Nov. 19, 2001.
That's soaked up most of the world's spare production capacity amid supply cuts
in Nigeria, Iraq and Venezuela.

Crude oil for February delivery rose $4.02, or 4.2 percent, to $100 a barrel at
12:10 p.m. on the New York Mercantile Exchange, the highest since trading began
in 1983.

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[Javaman]

7. Well bully for me...

:cry:

once that 3 digit threshold is broken (as it appears it has), I don't see an end to it.

The burner has now been set to $3 bucks a gallon. I see it set to $3.50 by the summer. And $150 oil by August.

[Orsino]

4. In other words, DOLLAR RECEDES TO LOWEST. n/t

[cgrindley]

6. One problem is that trading is done in US dollars

the US dollar has spiraled into worthlessness since 2001. Oil has certainly gone up a lot since then, but a good 40% of its climb is simply due to currency devaluation.

[paparush]

8. Oil traded for $100 today on NYMEX...from BBC -

Violence in Nigeria and Algeria, the weak dollar and cold weather have all raised prices after the New Year break.

Reaction to the assassination of the former Pakistani prime minister, Benazir Bhuto, also contributed to the rising prices.

Light sweet crude for delivery in February rose $4.02 to trade at $100 a barrel on the New York Mercantile Exchange (Nymex).

But some analysts played down the relevance of passing the $100 mark.

"The entire focus on $100 oil is frivolous," said Tim Evans at Citigroup Futures Research in New York.

"It is not a magic number. It doesn't suddenly make this a fundamentally strong market."

http://news.bbc.co.uk/2/hi/business/7168664.stm