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Commodities: Crude falls in late trading, gold soars

By Natasha Roberts

Date: Friday 27 Jan 2012

Commodities: Crude falls in late trading, gold soars

The continued threats from Iran to stop selling oil to the European Union sent oil prices temporarily above $101 a barrel on Thursday, although the commodity eventually settled to end the day below the $100 mark.

The weakening of the dollar also made an impact, ultimately lifting crude futures 30 cents to finish the day at $99.70 a barrel on the New York Mercantile Exchange.

Putting an end to four consecutive days of rising, natural gas futures lost 4.54% to settle at $2.6 per million British thermal units on the February contract.

The fall came despite the fact the Energy Information Administration reported that natural gas stocks had dropped by 192 billion cubic feet during the week ended January 20th. Consensus had bargained on a decline of between 171 billion to 175 billion cubic feet.

Both heating oil and unleaded gas ended the day higher, up 1.14% and 0.47%, respectively.

Meanwhile, gold futures soared to their highest levels in seven weeks, buoyed by the US Federal Reserve's statement which weakened the dollar and gave rise to investor worries over inflation.

The Fed, which had previously said it would maintain the federal funds rate between 0% and 0.25% until mid-2013, announced yesterday that it intends to leave them as they are until late 2014. According to the Federal Open Market Committee (FOMC), "economic conditions - including low rates of resource utilization and a subdued outlook for inflation over the medium run - are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014."

The February contract for gold gained 1.56% to settle at $1,726.7 per troy ounce, its highest closing point since December 7th.

In other metals, silver gained 1.88% to finish the day at $33.74 on the March contract, copper settled up 1.88% at $3.9 and platinum gained 2.36% to end at $1,616.8.

NR

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