US Commodities: Gold Surges On Crude Oil Climb, Stock Slide

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NEW YORK -(Dow Jones)- Gold futures pushed to their highest level in more than
three months Friday, boosted by financial market and geopolitical worries,
record high oil prices, a weak U.S. dollar and inflation concerns.


August gold jumped $18.60, or nearly 2%, to settle at $960.60 a troy ounce on
the Comex division of the New York Mercantile Exchange. The contract traded as
high as $967.30 during the session.


Gold - an alternative currency and inflation hedge - also benefited from a
record rise in U.S. import prices. That suggested upside inflation risk, even as
crude oil futures hit a record high above $147 a barrel. The crude oil jump
pressured the U.S. dollar.


Continuing market jitters concerning the possibility of support from the U.S.
government for mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) helped
gold, said Jim Steel, senior vice president and metals analyst with HSBC.


The agencies saw their shares plummet amid growing speculation the U.S.
government will have to backstop the housing giants in some manner. Concerns
about Fannie Mae and Freddie Mac also drove down New York stocks, Treasurys and
the dollar.


A report that Israel's military was using Iraqi airspace and U.S. bases in
Iraq to train for a possible attack on Iran also supported gold. A U.S. Defense
Department spokesman Friday denied the report by the Jerusalem Post, echoing a
denial by the Israeli government earlier in the day, CNBC reported.


"People were describing this as the next best thing to a perfect storm for
gold," said Andrew Montano, director of precious metals at Scotia Mocatta.


In other metals trading, September silver soared 50 cents, or more than 2.7%,
to settle at $18.82 an ounce. October platinum leaped $48.80 to $2,047.20 an
ounce, September palladium rose $5.80 to $457.80 an ounce, and September copper
climbed 2.15 cents to $3.74 a pound.


In Nymex energy trading, prices of futures on crude oil, gasoline and heating
oil rumbled to new intraday records Friday before surrendering some gains as
traders pocketed profits.


Light, sweet crude for August delivery set an intraday record of $147.27 a
barrel before settling at $145.08, up $3.43, or 2.4%.


Brent crude on the ICE futures exchange settled $2.46 higher at $144.49 a
barrel, after touching a record intraday price of $147.50.


Nymex crude has risen 51% in 2008 and nearly doubled from a year earlier.
After steep drops early this week, it paused Wednesday before surging the last
two days. Friday's close was 21 cents off crude's all-time settlement high of $
145.29, reached July 3.


Friday's gains, coming on the back of a $5.60 jump Thursday, were fueled by
threats of supply disruptions. Offshore platform employees of Brazilian oil
giant Petroleo Brasileiro (PBR), or Petrobras, negotiated with the company as a
Monday strike deadline loomed. The Campos Basin where they work makes up more
than 80% of Petrobras' Brazilian oil production, pumping 1.6 million barrels of
oil equivalent, or BOE, in June.


August gasoline settled 5.23 cents, or 1.5%, higher at $3.5632 a gallon after
hitting a fresh intraday record of $3.6310.


August heating oil rose 3.92 cents, or 1%, to finish at $4.0766 a gallon. It
earlier reached an intraday record high of $4.1586.


However, natural gas futures fell Friday, decoupling from the rising crude oil
market amid forecasts for fair weather across much of the U.S.


Natural gas for August delivery fell 39.6 cents, or 3.22%, to settle at $
11.904 per million British thermal units.


In grains trading, soybean futures finished Friday's day session posting solid
gains, with a tight soybean balance sheet and supportive outside market
influences underpinning prices.


July soybeans settled 21 cents higher at $16.30 1/2 a bushel on the Chicago
Board of Trade, and November soybeans ended 9 cents higher at $15.96. December
soymeal settled $4.10 higher at $428.10 per short ton. December soyoil finished
0.02 cent higher at 66.02 cents per pound.


The U.S. Department of Agriculture didn't provide any significant surprises in
its supply and demand reports, but a tighter ending stock forecast and
inflationary signals reinforced bullish long-term outlooks to buoying prices,
analysts said.


Meanwhile, wheat futures were boosted by technical buying and short covering.
Trading was thin, however. CBOT September wheat jumped 12 3/4 cents to $8.30 3/4
per bushel, down 56 3/4 cents on the week. Kansas City Board of Trade September
wheat climbed 16 cents to $8.64 1/2, down 47 3/4 cents on the week. Minneapolis
Grain Exchange September wheat gained 14 3/4 cents to $8.96 1/2, down 41 1/4
cents on the week.


In corn futures trading, July corn ended up 4 3/4 cents at $6.80 per bushel,
September corn closed up 4 1/2 cents at $6.91, and December ended 5 cents higher
at $7.09 1/4.


However, rice futures tumbled due to an increase in projected U.S. rice
stocks, analysts said. July rice, which is trading without limits because it is
in delivery, ended down $1.15 to $19.80 per hundredweight. September rice ended
down 50 cents, the daily trading limit, at $17.90, and November rice ended down
50 cents at $18.17 1/2.


At ICE Futures U.S., September arabica coffee closed 1.10 cents higher at $
1.4260 a pound, October world raw sugar futures settled 0.38 cent higher at
13.99 cents a pound, September cocoa finished $2 firmer at $2,912 a metric ton,
and December cotton settled 0.01 cent higher at 73.59 cents a pound.


-By Candace Cumberbatch, Dow Jones Newswires; 201-938-5644;
candace.cumberbatch@dowjones.com



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(END) Dow Jones Newswires
07-11-08 1647ET
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