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Commodities: New highs for oil and gold

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Date: Friday 29 Feb 2008

LONDON (ShareCast) - Oil prices surged to a new record high Thursday as the dollar continued to struggle against some of the key currencies.

US light crude for April delivery jumped $2.95 to $102.59 a barrel on the New York Mercantile Exchange, the highest ever close for a front-month contract.

There has been no sign of any let up in overnight electronic trade, with prices up another 22 cents to $102.81.

The dollar hit new lows versus the euro Thursday following disappointing reports on US unemployment and economic growth plus further comments from Fed chairman Ben Bernanke.

But analysts say there are no fundamentals to justify current levels and believe a correction is imminent, especially given the precarious state of the US economy.

Gold was also in demand on dollar weakness and inflation concerns, rallying $6.50 to $967.50 an ounce in New York, although it notched up a new record above $977 in electronic trade later on.

The fact that gold is denominated in dollars has made it more attractive to this holding other currencies.