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Commodities: Economic woes drive oil and gold higher

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Date: Tuesday 08 Apr 2008

LONDON (ShareCast) - Concern about the US economic outlook drove commodity prices higher Monday following Friday’s gloomy jobs data.

Comments from an OPEC official that the oil cartel will not increase production also boosted prices. US light crude oil for May delivery rose $2.86 to settle at $109.09 a barrel on the New York Mercantile Exchange.

A weekend press report quoted OPEC Secretary General Abdullah al-Badri as saying "there is enough oil in the market and no need to change OPEC's output.”

With Friday’s grim reminder of economic woes, expectations that the Federal Reserve will continue to cut interest rates increased.

Lower interest rates traditionally lead to a weaker currency and a weaker dollar makes oil cheaper to buy.

Among precious metals gold for June delivery closed $13.60 higher to $926.80 an ounce on the New York Mercantile Exchange as traders sought out its safe haven qualities.

Jitters about Friday’s data continued, reinforcing recessionary fears in the US.

May silver futures rose 37 cents to $18.12 an ounce, May copper futures gained 3 cents to $3.98 a pound. July platinum futures rose $16.40 to $2,046.90 an ounce while palladium for June rose $12.75 to $457.15 an ounce.