World gold and oil show signs of "price fever"
Stemming from a series of concerns such as the unstable geopolitical situation in the Middle East while the public debt crisis continues to drag on in Europe, last week, the prices of many commodities such as gold and crude oil increased sharply and are forecast to continue to increase this week.
Oil up 6%, gasoline up 4.6%
At the end of last week's trading session (February 24), the price of light, sweet crude oil for April delivery on the New York Stock Exchange increased by 1.94 USD, equivalent to 1.8%, to 109.77 USD/barrel, the highest since May 3, 2011. This is the 7th consecutive price increase for this crude oil futures, the longest price increase streak since January 6, 2010.
Overall, the price of this energy commodity increased by a total of 6% last week, the strongest increase since December 23. Since the beginning of February, oil prices have increased by 11%. In the London market, Brent crude oil for April delivery increased by 1.85 USD, equivalent to 1.5%, to 125.47 USD/barrel, the highest since April 29, 2011.
Gold and oil prices have recently increased and decreased in the same direction - Photo: Corbis.
The main reason for the sharp increase in oil prices last week was due to investors' fear that Iran could stop exporting oil to some European countries after the European Union (EU) imposed an oil embargo on the Middle Eastern country and the ongoing dispute between Iran and the West.
On February 23, an official of the International Monetary Fund (IMF) made a rather shocking comment that Iran's suspension of oil exports to member countries of the Organization for Economic Cooperation and Development (OECD) could cause crude oil futures prices on the international trading market to jump by 20 to 30%.
Along with crude oil, at the end of last week's session, gasoline prices for March delivery stood at $3.15/gallon, up 4 cents, or 1.3%. For the whole week, gasoline prices increased by 4.6% and since the beginning of February, this fuel has increased in price by 9.2%. Compared to the closing price of 2011, the current world gasoline price has increased by 17%.
Also on February 24, heating oil for March delivery rose 2 cents, or 0.6%, to $3.32 a gallon. Heating oil prices rose 4% last week. On the other hand, natural gas futures for March delivery fell 7 cents, or 2.7%, to $2.55 per million BTU. This commodity has fallen 5% this week.
Gold up nearly 3%, silver climbs 6.4%
Although gold prices fell slightly at the close last week as investors stepped up profit-taking, overall, gold still had its strongest weekly gain in four weeks thanks to expectations that China will further loosen its monetary policy and the prospect of near-zero interest rates in the next few years.
At the close of the February 24 session, the price of gold for April delivery on the New York floor decreased by 9.90 USD, equivalent to 0.6%, to 1,776.40 USD/ounce. The trading range of gold prices during the session was from 1,772.40 to 1,784.40 USD/ounce. For the whole week, the price of gold skyrocketed by 51 USD/ounce, equivalent to an increase of 2.9%.
Similar to gold, silver for March delivery fell 22 cents, or 0.6%, to $35.30 an ounce at the end of the session on February 24, but the price of this precious metal jumped 6.4% for the week. Palladium for March delivery fell $7.65 to $710.75 an ounce at the end of the week, but for the week it rose 3.3%.
Not out of this trend, platinum for April delivery closed down 0.8% at $1,703.6/ounce on February 24, but gained 5% for the week. Going against the general trend, copper for March delivery added 6 cents, or 1.5%, to $3.86/lb, bringing the increase for the past trading week to 4%.
According to analysts, in recent weeks, gold prices have moved in the same direction as crude oil. Geopolitical tensions in the Middle East, and especially speculation about the possibility of war in the Islamic Republic of Iran, are becoming a catalyst for both precious metals and energy commodities.
Latest developments on Iran
Israel said on February 25 that a recently released report by the International Atomic Energy Agency (IAEA) on Iran's nuclear program was new evidence confirming the Jewish state's suspicions that Tehran is trying to acquire nuclear weapons.
Israeli Prime Minister Benjamin Netanyahu's office said the IAEA report provided further evidence that Israel's assessments were correct. Iran is continuing its nuclear program. It is enriching uranium to 20%, in defiance of international demands.
Meanwhile, on the same day, the New York Times quoted anonymous US officials as saying that the latest assessments by US intelligence agencies were generally unchanged from findings from 2007, which concluded that the Islamic Republic of Iran had abandoned its nuclear weapons production program.
Reacting from Tehran, Press TV reported that on February 25, Iran's Defense Minister declared that the Jewish state would be destroyed if it attacked Iran's nuclear facilities. "It is certain that a military attack by Israel on Iran will result in the destruction of the Jewish state," General Ahmad Vahidi said.
According to VnEconomy
