Platinum fell off in the far East, rebounded to the New York open, then traded choppily through the rest of the day, to little ultimate effect as it ended at $1153, up $4. For the week, platinum was up 4.7%.

Silver was also off in Hong Kong, but rose sharply in Europe, peaking at $14.81, then traded inside a 20-cent range for the rest of the day, closing in the middle at $14.69, up 14 cents. For the week, silver gained a robust 5.3%. (Click here for charts)

The precious metals did well, holding onto their gains for the week in light trading ahead of the holiday weekend. The usual suspects did their part to provide support, with oil rising and the dollar falling again.

Of the two, “The gold price is predominantly driven by the dollar weakness at the moment,” said analysts at CommerzBank. “As long as the dollar remains on the back foot, gold should continue to rise.”

As has been the case for the past seven sessions, with gold pushing higher, holdings in the Gold SPDR Trust, the largest metal-backed ETF, haven’t budged. That has some wondering why, but in the end GLD is still a stock, not physical metal.

Looking ahead, Julian Phillips, of Goldforecaster.com, is highly bullish, writing that, “Gold has broken out of its long consolidation and looks set to take on $1,000 again.”

Phillips takes on the historical question, saying that, “This time of the year the gold market moved into the ‘summer Doldrums,’ but the last two years has seen this seasonality fade as investment demand knocked away this seasonality. With Indian buyers virtually absent from the international gold market since October 2008 until April this year we could have expected ‘Doldrums’ during that time. Now their absence is unnoticed as investment demand took the reins of the gold market and looks like holding them. So expect those Trade Winds to blow during summer and make the gold market an exciting place to be.”

The proper stars do seem to be aligning.

Source: Precious Metals Move Higher in Thin Pre-Holiday Trading

Friday’s result left crude down by 3.9% on the week, following a 10% rally the week before.

After reports that OPEC ratcheted up oil production in April, the first month in eight in which the cartel has increased output, Commerzbank analysts commented that, “Rising oil prices increase the incentive to expand production at the expense of other oil producers, in order to benefit from higher oil prices.”

“A weaker demand and higher OPEC supply may explain why oil stocks have been rising until recently,” the bank’s analysts added. “This also confirms our conviction that the oil price increase during the last weeks was overdone and a price correction toward $55 a barrel had to be expected.”

And natgas followed last week’s sharp gains with equally sharp losses, ending Friday at $4.098 per million British thermal units, down 5.2% for the week.

Source: Oil Off Sharply

“Fear is dominating the cyclical commodity markets today, as investors are concerned that the spreading of swine flu in Mexico may severely damp hopes of an economic recovery,” wrote analysts at Commerzbank.

However, “we consider these concerns premature and expect the oil price to move sideways, with some volatility between $45 and $55,” they added. “Given that oil market fundamentals are still weak, downside risks prevail at the moment.”

Edward Meir, of MF Global (NYSE:MF), concurred that, “The Mexican situation is resurrecting fears of the chilling impact that the SARS epidemic had on economic growth,” but also cited “nervousness about another batch of U.S. earnings reports and macro reports.”

Source: Oil Declines

It was the fourth straight session of gains for crude, as traders liked the fact that Ford (NYSE:F) reported a smaller-than-expected quarterly loss.

In addition, “A weaker U.S. dollar and rising stock markets provided support” for oil prices, said analysts at Commerzbank. “Crude prices are not currently being supported by fundamentals with [high] crude inventories in the U.S.”

Oil also benefited from equities that fought back from early losses to post gains for the day, and from the general uptrend in commodities.

And natgas continues to struggle, with gas for May delivery falling to $3.286 per million BTUs, down 31 cents on the week.

Source: Crude Pushes Higher

“The rally in the crude oil market is stemming from market influences outside the energy arena,” said Burton Schlichter, of New World Trading. “Strength in the equity market and the weakness in the dollar are dragging the crude oil market higher.”

Analysts at Commerzbank concurred, writing that oil’s recent gain “was largely driven by the financial markets and sentiment, based on hopes that demand would pick up again later on in the year … From a short-term perspective, though, the fundamentals remain difficult, meaning that oil prices were vulnerable to setbacks as witnessed right now.”

If only supply/demand fundamentals are considered, says James Williams of WTRG Economics, oil should be trading below $35 a barrel.

Source: Oil Rebounds

Investors spooked by volatility in other assets such as currencies and equities are buying the metal as a safe store of value, analysts said.

Spot gold climbed to $938.80/939.80 an ounce at 1014 GMT from $932.00 late in New York on Thursday. Earlier it touched a high of $941.90.

“Gold is considered in the first instance at the moment an insurance premium and a safe haven,” said Commerzbank analyst Eugen Weinberg. “It is the equity markets and risk aversion that are moving the market.”

The precious metal rose on Thursday as U.S. stocks tumbled to 12-year lows after General Motors said it was facing potential bankruptcy, and extended its gains as stocks slid in Asia.

World stocks struck a six-year low as Japan’s Nikkei average fell 3 percent in early trade. European shares opened a touch higher, but sentiment remains cautious.

Traders are awaiting key U.S. non-farm payrolls data due for release at 1330 GMT for clues as to the next direction of the markets. “Disappointing data could mean more pressure for U.S. equity markets,” said Standard Bank analyst Manqoba Madinane.

Economists expect the payrolls report will show the United States shed 648,000 jobs in February, compared to 598,000 in January. The unemployment rate is expected to have risen to 7.9 percent from 7.6 percent.

The dollar tumbled more than 1 percent against a basket of currencies, reversing recent gains, as investors braced for the data. Talk that the economy could have lost up to 1 million jobs had hit the U.S. currency hard, traders said.

SCEPTICAL

But analysts remain sceptical about gold’s ability to extend its gains. Commerzbank’s Weinberg said gold’s weak underlying fundamentals, with jewellery demand falling sharply and scrap supply picking up, pointed to a much lower price.

Demand for gold in India, the world’s largest market for the precious metal, remained slack as prices rose for a second day on Friday, while selling of scrap stepped up as gold holders cashed in after the recent price gains.

“There are no hopes of traders buying,” said Haresh Acharya, head of the bullion desk at Parker Agrochem Exports in Ahmedabad. “Sellers are coming in in huge numbers.”

Buying of gold-backed exchange traded funds was also stagnant, with holdings of New York’s SPDR Gold Trust , static for a fifth consecutive session.

Among other precious metals, spot silver tracked gold higher to $13.42/13.49 an ounce from $13.22. Earlier it touched a one-week high of $13.49.

Holdings of the world’s largest silver ETF, the iShares Silver Trust , declined by 82.8 tonnes on Thursday, and are down 282.1 tonnes or 3 percent from the record level they held last Thursday.

Spot platinum firmed to $1,070/1,080 an ounce from $1,058.50. Prices ticked higher on Thursday despite the announcement from General Motors and a spate of other price-negative data.

“That platinum remained comfortably above $1,000 an ounce despite ostensibly bearish news leads us to believe that the market is building a base from which to trade higher,” said HSBC analyst James Steel.

Spot palladium rose to $200/205 an ounce from $196, having earlier reached a 10-day high of $201.

March 6 (Reuters)

Nickel declined to the late morning, but then rallied back a bit to close at $4.6138/lb., down 5 2/3 cents. Zinc slid lower through most of the day, ending at $0.5061/lb., down a penny. Aluminum was weak, shedding more than a penny, to $0.6065/lb., while lead also edged lower, falling less than 2/3 of a cent, to $0.5112/lb.

Copper managed to eke out a small gain after three straight days of losses, but the other industrial metals all posted small declines as traders were underwhelmed by the stimulus package hacked out by Congress.

Commerzbank analysts were among the unimpressed, writing that, “In the medium term, the package should also revive the demand for base metals … in the short term, however, the effects on demand should be limited.”

The red metal’s recent strength represents the triumph of “hope over reality,” commented analyst Robin Bhar at Calyon. “Hope is that things are improving, reality is they are not,” he said, referring to the demand outlook.

On the stockpile front, yesterday’s addition was small but not non-existent. Copper inventories monitored by the LME advanced by 225 metric tons, to 516,675 tons.

Underscoring the weak demand in the eurozone, Norddeutsche Affinerie, Europe’s biggest copper producer, said it may shorten working hours in its copper processing division in Hamburg after posting a first-quarter pretax loss and announcing it expects its full-year profit to be down sharply.

Meanwhile, nickel prolonged a four-day slide on speculation demand will deteriorate as stainless-steel makers deplete inventories of the metal until they get some sign that economic growth is returning.

Demand for nickel will fall 15% this quarter from a year earlier and 10% in the next quarter, according to estimates from Barclays Capital. And Posco (NYSE:PKX), Asia’s biggest stainless-steel maker, cut prices last week for the first time since August, in an effort to up demand.

“We are clearly anxious over the coming quarters, and the market is remaining quite weak,” said Philippe Smits, of stainless-steel warehouse company Contisteel NV/SA in Belgium. “I’m not getting signs things are improving.”

Source: Industrial Metals Mixed

European shares hit a one-week trough on Thursday, led lower by banks, as poor corporate results and fresh signs of deteriorating global economic outlook overshadowed a compromise deal on a massive U.S. stimulus plan.

By 0949 GMT, the FTSEurofirst 300 index of top European shares was down 1.5 percent to 791.78 points after falling as low as 787.14. The index is down 4.8 percent this year after plunging 45 percent in 2008.

Banks were among the top fallers on the index, with Commerzbank falling 5.4 percent, Credit Agricole down 3.5 percent and Societe Generale declining 3.4 percent.

Energy shares were also under pressure as crude prices eased to trade below $36 a barrel — down 75 percent from a record high near $150 just seven months ago. BP , Royal Dutch Shell , Repsol and Tullow Oil shed between 0.3 and 1.3 percent.

Governments are using “historically strong medicines to try to revive a patient that is looking very weak at the moment and so far almost everything that has been used has failed to work,” said Henk Potts, strategist at Barclays Stockbrokers.

Investors hoped the measures would support in the long term, but there was a lot of nervousness before they saw the results of the U.S. government’s efforts on the economy, he added.

The pessimism over a compromise deal on a $789 billion U.S. package, which helped Wall Street shares to gain overnight, evaporated after investors scrutinised a raft of disappointing corporate results and macroeconomic data.

Figures showed Japanese wholesale prices dropped in the year to January, the first drop in five years, bringing the world’s second-largest economy closer to its second bout of deflation in a decade as the economy slipped deeper into recession.

Earnings results also hurt sentiment.

Swiss engineering group ABB posted an 88 percent fall in fourth-quarter net profit, oil major Total reported an 8 percent drop in profits due to lower oil prices and output, while banking group KBC booked a $3.4 billion loss due to writedowns.

RIO TINTO STAKE

“Asides from the stimulus package, the big news has been the large stake in Rio Tinto (RIO) being sold to Chinalco,” said Andrew Turnbull, senior sales manager at ODL Securities.

“The deal is said to be the largest overseas deal by the Chinese and really does show how desperate for cash Rio Tinto has become,” he said.

Rio Tinto will sell $12.3 billion in asset stakes to Chinalco and raise a further $7.2 billion by issuing China’s top aluminium maker convertible notes to cut debt, the global miner said. Rio shares were up 1.2 percent.

The negative market sentiment spread to other sectors such as mining, electricity, telecommunications and retail.

Miners, struggling due to falling prices and slowing demand of metals, fell again. BHP Billiton , Anglo American (AAL), Xstrata (AXTA) and Antofagasta (ANTO) fell between 0.8 percent and 3.3 percent.

Among electricity companies, Enel dropped 2 percent and Renewable Energy slipped 1.4 percent.

France’s EDF fell 7 percent after it posted a dip in 2008 core earnings, hit by a larger-than-expected 1.2 billion euro ($1.55 billion) charge related to French regulated tariffs.

Britain’s BT Group dropped more than 5 percent after its core earnings slumped 9 percent in the third quarter and pre-tax profits slumped 81 percent.

Among gainers, French carmaker Renault rose 5.9 percent after it dropped its once sacrosanct 2009 profit targets and said it would focus on cutting inventories this year.

Across Europe, the FTSE 100 index, Germany’s DAX and France’s CAC 40 were down 1.1-1.9 percent.

LONDON, Feb 12 (Reuters)

Gold slipped on Wednesday as investors cashed in profits after the precious metal hit a three-month high earlier this week, with a recovery in stock markets indicating the beginnings of a revival in risk appetite.

Spot gold was quoted at $892.10/894.10 an ounce at 1510 GMT, down from $897.35 late on Tuesday. U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange dipped $6.80 to $892.70 an ounce.

Gold has been well supported by investors’ fears over systemic risk and the outlook for the economy, which sent the metal to a three-month high on Monday. But signs are emerging that this risk aversion is ebbing, prompting some profit taking.

“Technically, the daily charts are overbought and warrant profit taking after a relentless rally over the fag-end of last week,” said Pradeep Unni, senior analyst at Richcomm Global Services.

Moves in the dollar versus the euro, which usually push gold in the opposite direction, are currently being trumped by the perception of risk.

The euro rose against the dollar on Wednesday as risk aversion cooled, pressuring gold, while investors awaited the end of a meeting of Federal Reserve rate setters.

While headline interest rates are unlikely to change from their current level of zero to 0.25 percent, investors will be looking for further news on U.S. quantitative easing and details of a proposed “bad bank” to take over toxic banking assets.

European shares also ticked up for the third consecutive day, with banks leading the market higher.

U.S. stock futures also rose on optimism the new Obama administration will move quickly to stabilize the ailing banking sector.

“In the last days the gold price was moving higher despite the stronger dollar,” Eugen Weinberg, an analyst at Commerzbank, said. “The risk aversion of the market participants was playing a huge role.”

“Right now, the European equity markets — another indicator of risk aversion — are friendlier and are showing some recovery. In this case, you are not looking for a safe haven.”

Oil prices, typically another key external driver of gold, were steady at just below $42 a barrel.

Fears over the outlook for the economy and growing systemic risk are currently playing a greater role in the direction of gold than its usual drivers, oil and currencies, analysts said.

SPDR SOARS

The 7 percent rise in the SPDR Gold Trust’s bullion holdings this year is widely attributed to safe haven buying.

The trust, an exchange-traded fund which issues securities backed by physical stocks of bullion, has seen interest soar as investors seek out physical gold.

However, jewelery demand remains depressed as prices hold near $900 an ounce, particularly in key global centres such as India, China and the Middle East.

“Jewelers are not comfortable buying at such high prices,” said Harshad Ajmera, proprietor of Kolkata bullion dealer JJ Gold House.

Among other precious metals, silver prices were little changed at $12.02/12.08 an ounce from $12.01.

The iShares Silver Trust , the world’s biggest silver-backed ETF, said its bullion holdings rose more than 110 tonnes on Tuesday to a record 7,453.15 tonnes, and are up more than 300 tonnes in the first two days of the week.

“What we tend to see between gold and silver prices is that initially people will opt for gold as a safe-haven asset, but if gold prices rally too far, the cheaper option is to buy silver instead,” said Barclays Capital analyst Suki Cooper.

Platinum and palladium firmed a touch. Spot platinum was at $950/958 an ounce against $945, while spot palladium was at $189/194 from $188.50.

A Reuters precious metals survey of 56 analysts showed most believe platinum prices will remain depressed this year as an expected small supply dip fails to balance falling demand from major consumers carmakers.

LONDON, Jan 28 (Reuters)