Gold accelerated to a new peak due to prospects for central bank buying and further dollar weakness. Various central banks expressing their interest in buying gold and persistent dollar weakness were the major drivers that would boost bullion to fresh peaks. Bullion has risen more than 37% this year, including a 13% rise in November alone on dollar weakness, expectations of further reserve diversification by central banks and fears of inflation next year. The International Monetary Fund said it had sold 10 tonnes of gold to the Central Bank of Sri Lanka, a part of the 403.3 tonnes approved for sale by the fund's executive board in September. The fund has already sold 202 tonnes to the central banks of India and Mauritius. It appears that central banks are prepared to expand their gold reserves despite the current high gold price level, which in turn increasingly attracts private investors back to the market.
Crude oil dwindled to almost $76 a barrel in line with falls across financial markets and as weak demand for fuel offset potential support from a weak dollar. The dollar hit a 14-year low against the Japanese yen earlier but failed to push up oil prices, which succumbed to weak fundamentals with inventories swelling in the United States and Asia. Crude oil has surged from below $33 in December, but weak demand has kept prices way below its record high of $147 hit in July last year. Elsewhere Copper plunged from 14- month highs, as the dollar edged off multi-month lows and stocks of the red metal and aluminium rose.
Global stock markets fell after Dubai asked creditors of two of its flagship firms for a standstill on debt worth billions of dollars as part of restructuring Dubai World, the conglomerate that spearheaded the emirate's growth. Sentiment was also dented by rising inventory levels.
