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Commodities: Gold and oil on slippery slope

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Date: Tuesday 25 Mar 2008

LONDON (ShareCast) - Gold's decline was extended Monday, with prices falling for the third straight day in New York as the dollar maintained its recovery and investors continued to sell the yellow metal to fund investment in resurgent equities.

Gold for April delivery fell $1.30 to $918.70 an ounce.

By contrast, other metals made headway, with silver, platinum and copper ending the day dearer.

The oil price also continued its journey south, with the May futures contract falling almost a dollar to $100.86, after sliding just under $7 last week.

Over the week-end OPEC President Chakib Khelil was reported as predicting that oil prices would trade between $80 and $110 a barrel for the rest of the year.

The dollar's recovery continues to damp down demand but some succour was to be found from the February housing sales data which indicated the US housing market may be stabilising - a good sign for the US economy and therefore for continued demand for oil.

Sales of existing homes in the US rose 2.9% in February when most observers had been expecting a small fall.