Europe Holds Onto Gains

Ivaylo
03 Jul, 2006
New York City

Gold once again pushed well through the $600 an ounce mark as the dollar weakened on Friday and crude edged back towards the psychological $75 a barrel, the mining and petrochemical stocks were looking to be in favour once again. Asian stocks also helped starting off the week in a positive mood after bullish results from the Bank of Japan''s quarterly tankan survey of business sentiment boosted financials, retailers and exporters.

[R]6:30 AM European shares advanced lifted by commodities and strong Asia.[/R]
European markets traded higher on Monday. The U.K. FTSE 100 index edged up 0.4% to trade at 5,854, the German DAX Xetra 30 index gained 0.2% at 5,694 and the French CAC-40 index increased 0.01% at 4,966. European movers included U.K. defense contractor BAE Systems which dropped 4.3% after it announced that an independent expert has valued its 20% stake in European plane manufacturer Airbus at 2.75 billion euros, below market expectations. EADS, which owns the rest of Airbus, edged down 0.5%. Oil companies were also in demand after British oil giant BP said that second-quarter production is expected to reach 4 million barrels of oil equivalent a day, or 3 million boepd excluding TNK-BP operations, primarily due to divestments. BP shares slipped 0.1% in London. British supermarket group WM Morrison advanced 1.7% in London after a report stated that the company is being targeted by a private-equity consortium consisting of Texas Pacific, CVC and Permina. Also, brewing company SABMiller increased 1.4% after it said that it has agreed to buy the Sparks and Steel Reserve brands and related and related trademarks from McKenzie River Corp. for $215 million.

Oil prices reached nearer $74 a barrel on Monday on concerns over the possibility of record demand for gasoline during the Independence Day holiday in the US. Nymex is closed for atwo days because of the Independence day holiday. Brent crude for August delivery rose 15 cents to $73.66 a barrel. Gold hit a high of $620.50 an ounce before easing to $619.35/620.35 by 0944 GMT. The U.S. dollar advanced against most other major currencies in European trading Monday. The euro traded at $1.2760, down from $1.2787 late Friday in New York. The dollar bought 114.76 Japanese yen, up from 114.38. The British pound traded at $1.8432, down from $1.8485.

[R]5:00 AM Gold rallies ahead of the weekend.[/R]
The benchmark August gold contract on the NYME ended $27.10 higher at $616 an ounce. The contract reached $618 an ounce during the session marking its highest level since June 9. September silver finished up 50 cents at $10.920 an ounce. The contract got to a high of $11.13 an ounce. October platinum closed up $41 at $1,241.70 an ounce. September palladium finished up $10.10 at $323.50 an ounce. The most-traded September copper contract advanced 3.40 cents to settle at $3.3550 per pound.

The August crude oil contract advanced as high as $74.50 a barrel before closing at $73.93 a barrel, up 41 cents. July gasoline finished down 9.27 cents at $2.2021 a gallon as traders liquidated long positions ahead of the contract''s expiration. On the New York Board of Trade, July Arabica coffee futures ended up 2 cents at 99.50 cents a pound, while September gained 2.25 cents to $1.0110 a pound. Futures on raw sugar in foreign ports for July finished up 0.16 cent at 15.79 cents a pound while October advanced 0.11 cent at 16.34 cents a pound.