Oil Prices Climb Above $62 a Barrel

Oil prices spiked above $62 a barrel Friday, as unrest in the Middle East and Nigeria helped vault front-month contract prices to their highest level since December.Light, sweet crude for May delivery on the New York Mercantile Exchange gained 63 cents to $62.32 in morning trading on the New York Mercantile Exchange, after earlier climbing as high as $62.65. Friday's rise follows a surge of more than $2 a barrel the previous day after U.S. government figures showed refineries are boosting crude usage to make gasoline and other products.The May contract for Brent crude jumped 83 cents to $63.34 a barrel on London's ICE Futures exchange."There's a good solid list of fundamental supports for the market," said Citigroup Global Markets energy analyst Tim Evans. "There's nothing on the other side of the scale,"At the top of the list was Britain's Ministry of Defense saying Iranian naval vessels seized 15 British sailors and marines in Iraqi waters. Britain said the personnel were "engaged in routine boarding operations of merchant shipping in Iraqi territorial waters," and had completed their inspection of a merchant ship when they were accosted by Iranian vessels.Also adding to the market's worries was gunmen kidnapping three foreigners in southern Nigeria, Africa's biggest oil producer. Police said unidentified assailants waylaid a vehicle carrying an Indian and a Lebanese man in Warri and kidnapped them. In a separate incident, authorities said gunmen stormed a German construction firm in the main southern oil city of Port Harcourt and kidnapped a Dutch employee.More than 150 foreign workers have been seized in the Niger Delta during a year of stepped-up militant attacks and rising crime. Militants say they are fighting to force the federal government to give more oil revenues to their region and release two leaders on trial for treason or corruption charges.The focus back on geopolitical factors came after a U.S. inventory report released Wednesday that indicated that refineries are beginning to emerge from their seasonal maintenance period, after weeks of declining utilization, and will soon start demanding more crude oil ahead of the U.S. driving season.

Dollar Higher, Gold Up in Europe

The U.S. dollar traded higher against the other major currencies in European trading Thursday. Gold rose. The euro traded at $1.3355, down from $1.3381 late Wednesday in New York. Later, in midday trading in New York, the euro fetched $1.3358.Other dollar rates in Europe, compared with late Wednesday, included 117.80 Japanese yen, up from 117.47; 1.2113 Swiss francs, up from 1.2089; and 1.1572 Canadian dollars, up from 1.1541.The British pound traded at $1.9678, down from $1.9687.In midday New York trading, the dollar bought 117.84 yen and 1.2118 Swiss francs, while the pound was worth $1.9675.Gold traded in London at $663.60 per troy ounce, up from $658.50 late Wednesday. In Zurich, gold traded at $662.30, up from $656.70. Gold closed at $665.40 an ounce on Thursday in Hong Kong, up $4.80 an ounce from Wednesday's close of $660.60.Silver traded in London at $13.39 per troy ounce, up from $13.20.

No Shortage of Gold Buyers

Heavy investment-led gold buying was the key factor driving bullion prices to their second-highest level ever last year, according to a new report published Thursday by CPM Group, a New York-based specialty consulting firm. The last time prices were close to 2006's mean level of $607 an ounce was in 1980. At that time the average price hit $612 and gold peaked at $850 on an intraday basis. "Lower sales by central banks and declining mine production aided the increase in prices, but the premier reason for the high gold prices was investment demand," states CPM Group's Gold Yearbook 2007 which was put together by a team of analysts led by company founder Jeff Christian. The good news for the bulls is that historically high levels of gold buying by investors will likely continue through this year, the study concludes.

Gold inches higher ahead of report

LONDON (Reuters) -- Gold pared earlier gains of around one percent as the latest buying spree, aided by a drop in the value of the dollar, fizzled out when prices neared $655. "Gold definitely took a positive lead from the dollar and investors are coming back into the market now," said Michael Widmer, director of metals research at Calyon Corporate and Investment Bank. But overall the price rises that we have seen were not as big as we would have expected given the drop in the dollar since the beginning of March," he added. Investors remained jittery due to the metal's sharp fall after hitting a nine-month high of $689 on Feb. 26 and long trading positions in the New York market "People are still speaking about big long positions still in the market. I don't expect them to have fallen much further as that would have meant much lower prices over recent days and this is not what we saw," one trader said. The Commodity Futures Trading Commission will release data for the week to Tuesday later in the day. UBS Investment Bank said in a daily note it estimated about 4.5 million ounces (Moz) of long liquidation in the week to March 13.

US gold jumps 1 pct on fund buying, housing report

NEW YORK, March 20 (Reuters) - Buying by funds drove U.S. gold futures 1 percent higher early on Tuesday, as a robust housing report and a weaker dollar also helped push the precious metal contracts to its highest in more than two weeks.
At 10:32 a.m. EDT (1432 GMT), most-active gold futures for April delivery on the COMEX division of the New York Mercantile Exchange was up $7.10, or 1.1 percent, at $661.40 an ounce. They traded between $653.30 and $662.00, the loftiest level since March 2.
Carlos Perez-Santalla at Hudson River Futures said that Tuesday's rally in gold was largely due to fund buying, as the dollar had barely moved.
The pace of U.S. home construction rose 9 percent in February, beating analysts' predictions and running against dismal news in the subprime home financing sector, a government report showed on Tuesday. [ID:nN20347031]

Merrill raises gold view, still sees $700 by May

NEW YORK (Reuters) - U.S. brokerage Merrill Lynch raised its long-term forecasts for gold prices, citing positive supply-demand fundamentals, while keeping its view unchanged that bullion could hit $700 an ounce by mid-May.

In a research note dated Monday, Merrill lifted its view of gold prices to $675 from $650 an ounce for 2008, up to $650 from $625 an ounce for 2009, and to $625 from $600 an ounce for 2010.

"Our near-term view remains that gold will trade to $700 an ounce by mid-May on the back of buying for the looming Indian wedding season," Merrill Lynch analyst Michael Jalonen said in a research note.

Merrill also said it was raising its 2007 silver forecast to $13.75 from $13.00 an ounce, and increasing its price forecasts for 2008, 2009 and 2010.



Spot gold was quoted at about $660 an ounce on Tuesday. It has gained nearly 10 percent from its five-month low in January, but was still sharply below its 2007 high of $689 an ounce set on Feb 26.

Silver traded around $13.35 an ounce on Tuesday, and has declined about 9 percent from its year high of $14.72.