Gold inches up on worries over Libya and EU debt issues, Crude Oil dipped on inventory increase
Gold futures on the COMEX Division of the New York Merc edged up Wednesday, as tension in Libya and continuing worries over the European debt problem triggered more safe-haven demands.
The most active Gold contract for Apr delivery 2.4 oz, or 0.17%, to settle at 1,429.60 oz.
Apart from the persisting conflict in Libya, Gold was supported by renewed worries about Europe's debt problems after a Portuguese bond sale.
The Euro fell below its recent 4 month highs against the "Greenback", as investors showed more concerns over the EuroZone's debt problems, but closed off into the close.
Some analysts opined that Gold's gains may be limited on speculation that central banks will raise Key interest rates to curb inflation, eroding demand for the precious Yellow metal as an alternative asset.
Silver for May delivery gained gained 38.9c, or 1.1%, to 36.047 oz. and Apr Platinum fell 60c, or 0.03%, to 1,802 oz.
US Crude Oil price dipped on Wednesday as Crude inventories rose more than expected. But Brent Crude rose on fears caused by continued chaos in Libya.
The Energy Information Administration reported on Wednesday that US Crude stocks rose by 2.52M bbls to 348.9M in the week ended March 4, beyond the market expectation of a 1M bbl increase.
And according to the report, the Crude inventories at Cushing, Oklahoma, the delivery point for New York Crude benchmark, added 1.7M bbls to 40.3M last week, the highest level since the data began to be gathered in the US.
High supply sent Crude Oil South, but the losses were limited by the more than expected draw of Gasoline and distillate inventories, indicating strong demand.
Last week, the Gasoline inventories fell a very steep 5.5M bbls for the 3rd straight heavy draw and distillate inventories fell 4.0M bbls for a 4th straight draw.
Meanwhile in London, the Brent Crude rose as the fighting intensified in Libya. Libyan National Oil Corporation Chairman Shukri Ghanem said that because of the continuing clashes, more than 66% of Libya's Crude Oil output has been shut off. The premium of Brent over New York crude benchmark spread again to above US$11.
Light, Sweet Crude for April delivery dipped 64c to settle at 104.38 bbl on the New York Merc. But Brent Crude rose 2.88 to settle at 115.94 bbl on the ICE Futures Exchange.
US Dollar slips on Portugal bonds auction
US Dollar fell against major currencies in late New York trading Wednesday as the Euro rose despite that the Portuguese bonds was sold at a high yield.
The Portuguese government sold 1B Euros of 2 yr bonds Wednesday, but at a high yield of 5.993%, up from 4.086% in a sale last September. Bids exceeded supply by 1.6 times, also down from 1.9 in the September auction as concerns that the Country will seek a bailout spread in the market.
But, the Euro edged higher vs. the USD Wednesday as the expectation of a Key interest rate hike in the EuroZone provided Strong support.
Meanwhile, Britain's trade deficit gap narrowed in January, driving up the GBP vs. the USD Wednesday.
According to a report from Britain's Office for National Statistics, the British goods trade deficit shrank to 7.1B GBPs from an upwardly revised 9.7B GBPs in December, beating economists' estimates of 8.6B GBPs.
The GBP rose to 1.6205 vs the USD in early trading Wednesday. The Dollar Index slipped to 76.689 from 76.796 in late Tuesday.
In late Wednesday trading, the USD bought 82.70 Yen, comparing with 82.65 late Tuesday, and the Euro rose to 1.3904 from 1.3903 vs the USD.
