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Commodities: Middle east tensions boost oil

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Date: Friday 28 Mar 2008

LONDON (ShareCast) - Gold finished trading in New York moderately cheaper, weighed down by a rally by the US dollar.

Gold for April delivery eased 40 cents to $948.80, as the yellow metal failed to sustain the surge seen the preceding day when the price of April contract advanced more than $14. The spot price fell by just over $5 to $949.

Palladium prices also eased but copper, silver and platinum made headway.

Increasing tensions in Iraq pushed the price of crude oil above $107 a barrel. Crude for May delivery moved up $1.68 to $107.58 after a second oil pipeline in Basra, Iraq suffered a bomb attack. Iraq’s oil minister maintained that the reported violence would not affect oil exports and drilling operations.

Oil's gains were limited by the strength of the dollar and also economic data which showed US GDP growing at an annual rate of 0.6%, its lowest rate since late 2002. A slow-down in the US economy would dampen demand for oil.