Gold prices jump to $750 an ounce

Gold prices jump to $750 an ounce

	Published : Fri, 28 Sep 2007 21:09 By : Agencies Print this Story

NEW YORK (AP) - Gold rose on Friday to the highest level since 1980 as the U.S. dollar scavenged new lows against the euro and oil prices held over $80 a barrel.

Commodities closed the last trading day of the third quarter with substantial gains, despite a bumpy ride through August when concerns about credit availability roiled financial markets. Crude oil prices fell at the close on Friday, while gold prices and wheat finished higher -- but all were stand-out gainers during the quarter.

The ability of many commodities to endure the exceptional volatility in financial markets this quarter reflects the strong global growth in developing countries such as China, India and Russia, said John Derrick, director of research with U.S. Global Investors. China is now the 'lynchpin,' as its demand for raw materials drives wealth creation elsewhere, he said.

'There is a lot of concern about a slowdown in the U.S.,' Derrick said. But commodities durability during the quarter 'is a good example of how the growth overseas more than makes up for the slower growth here.'

Gold prices climbed as investors sought shelter from a weakening dollar. The dollar's decline against the euro has been precipitous this week; the greenback has carved out new lows for seven straight trading days. On Friday, the euro bought more than $1.42.

There were signs of strong gold demand from India this week, said Tom Pawlicki, an analyst with MF Global in Chicago. India, the world's largest gold consumer, is in the midst of its wedding and festival season, a traditional time of gold-buying for gifts and investment. A revved-up economy and healthier rupee have augmented India's buying power.

December gold advanced $10.10 to $750 an ounce on the New York Mercantile Exchange -- the highest since gold spiked above $850 in January 1980, according to Thomson Financial data. December silver jumped 27.5 cents to close at $13.92 an ounce.

Gold and silver ended the quarter up 15 percent and 13 percent, respectively.

Oil prices fell Friday but finished the quarter on a strong note, up roughly 16 percent. A bout of late profit-taking ended a three-day rally in crude, as investors on Friday pushed prices near the all-time peak of $83.90 a barrel reached last week before selling off.

Light, sweet crude for November delivery shed $1.22 to settle at $81.66 a barrel on the Nymex, after earlier touching an intraday high of $83.76. Gasoline futures for October, which expired at the close, dipped 2.56 cents to $2.0683 a gallon.

Elsewhere, industrial metals prices mostly decreased on the London Metal Exchange. Nickel dropped 4 percent, but losses were otherwise modest. Copper ended flat in London while edging down in New York. December copper dipped 0.8 cent to settle at $3.64 a pound on the Nymex. The metal gained 5 percent in the third quarter.

In Chicago, corn and soybean futures gave back the gains made a day earlier, while wheat continued its rise. Strong export demand has prodded wheat prices to an-all time record as the market struggles with shrinking global supply. Wheat traders pushed futures to a new record of $9.6175 a bushel on Friday.

'The active demand from key world importers, despite the move to all-time highs, has traders believing that the wheat price is still not high enough to ration demand,' the Australian Wheat Board said in a daily market commentary on Friday.

Higher wheat prices also mirror concerns the market won't get the usual cushion of supply from the Southern Hemisphere, either. A drought in Australia has prompted that country to cut its production estimates for this year's crop by roughly half.

December wheat rose 6 cents to settle at $9.39 a bushel on the Chicago Board of Trade -- a 54 percent increase over the quarter.

Corn for December delivery fell 13.75 cents to $3.73 a bushel, but was up 5 percent for the quarter. November soybeans dropped 17.75 cents to $9.9125 a bushel; the price was up 11 percent over the past three months.