Newspaper article THE JOURNAL RECORD

Surge in Prices Seen for Some Commodities

Newspaper article THE JOURNAL RECORD

Surge in Prices Seen for Some Commodities

Article excerpt

Precious metal futures prices surged Wednesday on New York's Commodity Exchange on the heels of an energy rally, the sliding stock market and concern over the political climate in the Soviet Union.

On other markets, energy futures were sharply higher, grain and soybeans were lower, livestock and pork were mixed, and copper declined.

Gold settled $8 to $8.40 higher with the contract for delivery in February at $414.20 a troy ounce. Silver was 7 cents to 7.2 cents higher with March at $5.368 a troy ounce.

The surge in gold prices began overnight with rumors that Soviet President Mikhail Gorbachev had resigned, said analyst Bette Raptopoulos of Prudential-Bache Securities Inc. The rumors proved false, but they stepped up demand for gold among Japanese and European buyers.

The sharp drop of the Tokyo Stock Exchange in recent days also spurred gold buying, as did a 15-point drop Wednesday in the Dow Jones industrial average.

A violent railroad strike in South Africa, a leading gold producer, also caused concern in the gold market.

A secondary factor was a surge in energy prices on New York's Mercantile Exchange. Analysts say some investors view increased crude prices as an inflation barometer and the gold market as an inflation hedge.

The rise came amid continued concern over supplies following American Petroleum Institute inventory data, said Jerry Samuels, an analyst with Shearson Lehman Hutton Inc. in New York.

The figures, released Tuesday, showed a drawdown of 6.4 million barrels in gasoline stocks last week, more than was expected. There also was a decrease in stocks of distillates, which include heating oil, but a slight increase in crude oil stocks.

West Texas Intermediate crude oil was 45 cents to 83 cents higher with February at $22.90 a barrel; heating oil was 1.40 cents to 2 cents higher with February at 66. …

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