news.ft.com By Ivar Simensen in London Published: January 27 2003 10:49 | Last Updated: January 27 2003 16:36

Investors continued to move out of equities and into commodities on Monday, pushing gold prices to fresh highs along the way, as the fear of war in Iraq continued to dominate investor sentiment.

Spot gold jumped to $372.5 per troy ounce in London, its highest level since December 1996. It was at $370.6 as US trading got under way.

Investors moved into commodities after US and UK officials at the weekend made it clear that they were ready to go to war with Iraq alone if an agreement with the United Nations security council could not be reached.

Colin Powell, the US secretary of state, on Sunday told global business and government leaders at the World Economic Forum in Davos: "The US is in no rush to go to war. We seek Iraq's peaceful disarmament. But we will not shrink from war if that is the only way to rid Iraq of its weapons of mass destruction." See more on Mr Powell's warning to Iraq

Other metal prices were strong, with platinum at $643 per troy ounce, slightly off last week's 16-year high of $652.

Prices were steady as investors watched Hans Blix, the chief UN weapons inspector, deliver a key report to the United Nations security council on Monday.

On the International Petroleum Exchange in London, Brent crude gave up early gains and the benchmark March contract was 19 cents lower at $30.30 per barrel. Nymex-traded crude was down 31 cents at $32.97 in New York.

A war in Iraq could potentially curb oil supplies from the oil-rich region, which would send oil prices surging from already firm levels. Inventory levels in the US are at their lowest for several years, following the absence of imports from Venezuela, where a general strike has dramatically cut oil exports since the beginning of December.

santafenewmexican.com By ALAN CLENDENNING | Associated Press 01/27/2003

From left, French activist Jose Bove and Bernard Cassen meet Venezuelan president Hugo Chavez for a private meeting on Sunday, Jan. 26, 2003. - AP | Giuseppe Bizzarri

PORTO ALEGRE, Brazil—Venezuelan President Hugo Chavez, facing protests at home, got an enthusiastic welcome after arriving at the World Social Forum to meet with sympathizers among 100,000 activists venting against American-style capitalism.

Chavez met with forum organizers and addressed activists Sunday in this far southern Brazilian port city, harshly criticizing opponents in Venezuela staging a 56-day strike.

He said they would fail to oust him from power, and praised activists for their opposition to neoliberalism - their term for a mix of unfettered free-market economics, liberal trade and the breakdown of national borders

"You here at the forum and we in Venezuela are trying to come up with an alternative to neoliberalism that is destroying the world," Chavez said in a two-hour speech attended by more than 2,000 cheering activists. "If we don't put an end to neoliberalism, neoliberalism will put an end to us."

Before he spoke at Port Alegre's state legislature, hundreds showed up outside and handed out free copies of a book in English and Spanish entitled, "The Fascist Coup Against Venezuela," a compilation of Chavez speeches over the last two months.

Dressed in her white habit and waving a small Venezuelan flag, Franciscan nun Maria Vandege Santa said Chavez is fighting injustice and poverty in Venezuela.

"I am here to protest the efforts to topple a president who only wants to help the poor," said Santa, who lives in Brazil's poverty-stricken northeast.

Chavez said would soon propose a tax on all financial transactions in Venezuela, saying it would be "a kind of Tobin tax." Tobin taxes, named after Yale University economist and Nobel-laureate James Tobin, are designed to tame currency market volatility.

Chavez did not provide more details on the new tax, nor when he would seek to have it put into place. He also said Venezuela's dollar-based reserves dropped a total of US$3 billion in December and January.

Opponents gathering signatures to demand a constitutional amendment that could lead to early elections are welcome to do so, Chavez said, but claimed an earlier effort was tainted by fraud.

Any new effort "has to be a valid collection of signatures," Chavez said.

Although Chavez wasn't formally invited to the World Social Forum, a counter-conference to the World Economic Forum being held in Davos, Switzerland, he was attending some events.

Activists at the six-day social forum are participating in 1,700 sessions and workshops on topics ranging from corporate misdeeds to Third World debt.

Chavez fits right in, many say, because he advocates political, social and economic revolution to solve South America's ills.

He came to the forum because he "wants to further address in Porto Alegre the same issues of poverty, misery and corruption that he is trying to address in Venezuela," said Jo Moraes, vice president of the Communist Party of Brazil.

The strike in Venezuela has paralyzed the country, crimped oil production for the world's fifth-largest oil exporter and caused severe food and fuel shortages. Chavez told reporters, however, that oil production that was once as low as 200,000 barrels per day is rising and is now at 1.32 million barrels a day.

On Sunday, at least 100,000 Venezuelans were parked on a Caracas highway in what they said would be their longest protest yet against Chavez.

But Chilean Senator Gladys Marin, a Communist, said Chavez is helping to fight what could become fascism in South America.

"If this coup wins, you will suffer a long dictatorship and it will be cruel," she told 1,000 activists gathered at a forum workshop.

Also Sunday, an unidentified woman threw a strawberry cake into the face of Jose Genoino, the head of President Luiz Inacio Lula da Silva's Workers Party, yelling "Lula does not represent us in Davos."

Some activists criticized Silva, who is popularly known as Lula, for going to the economic forum in Switzerland after attending the social forum.

The woman left a statement saying she belonged to a group called "Bakers Without Borders." Genoino called the incident an "act of anarchists," according to Brazil's GloboNews television network. The woman fled, and no efforts were made to detain or arrest her.

santafenewmexican.com

By JOSEPH B. FRAZIER | Associated Press 01/27/2003

Venezuelan President Hugo Chavez gestures during a press conference in Porto Alegre, Brazil on Sunday Jan. 26, 2003. - AP |

CARACAS, Venezuela—President Hugo Chavez said he would put in place price and currency controls as Venezuela's economy heads for a tailspin stemming from an opposition strike, which was entering its ninth week Monday.

"So that these (currency) controls do not hurt the poor, we will institute price controls," Chavez said Sunday in Porto Alegre, Brazil, at the World Social Forum. He did not give details of the controls.

Hundreds of thousands of his foes occupied a central Caracas highway for the entire weekend to protest a Supreme Court decision suspending a Feb. 2 referendum on Chavez's rule.

After extending the protest well beyond the 24 hours planned, protesters finally rolled up their national flags - and, in many cases, their tents - and let traffic flow again.

Opposition leaders said instead of the referendum they would collect signatures Feb. 2 petitioning for Chavez to quit, for his term to be cut and for pro-Chavez lawmakers to be replaced.

A coalition of business, labor and political groups called the strike Dec. 2 to pressure Chavez into accepting the referendum.

Although the referendum wouldn't have been binding, opponents had hoped a negative outcome would have embarrassed Chavez into quitting.

Cutting his term through a constitutional amendment would pave the way for early elections. The amendment would involve cutting Chavez's six-year term, currently due to run until 2007, to four.

Amending the constitution requires a popular referendum. Citizens can demand such a vote by collecting signatures from 15 percent of Venezuela's 12 million registered voters.

Chavez suspended foreign currency dealings for five business days last Wednesday to halt the rush of nervous Venezuelans trading in their bolivars for dollars. The currency has lost 25 percent of its value this year alone.

On Sunday, he said he will soon propose a tax on all financial transactions in Venezuela, saying it would be "a kind of Tobin tax." Tobin taxes, named after Yale University economist and Nobel-laureate James Tobin, are designed to tame currency market volatility.

Chavez did not provide more details, but said Venezuela's dollar-based reserves dropped US$3 billion in December and January as a national strike dried up oil exports.

Dollars are needed to buy food - about half of which is imported - medicines and other essentials, some of which already are in short supply.

Venezuela must import gasoline, which is so hard to find that lines at the few open stations sometimes stretch for a mile (1.6 kilometers) or more.

Oil provides 80 percent of the government's foreign exchange and makes up a third of gross domestic product. Before the strike, Venezuela was the world's fifth-largest supplier.

Chavez said Sunday that oil production has risen to 1.32 million barrels a day. But dissident oil executives put the figure at about 957,000 barrels. Pre-strike production was about 3.2 million barrels, and fell as low as 150,000 barrels early in the strike.

Many small businesses that joined the strike at its outset Dec. 2 have since returned to work but thousands of others have refused to open up, despite the damage being wreaked on the economy.

Exchange controls will help protect the bolivar and the government's depleting foreign reserves. But they will hurt many businesses as dollars are needed to buy food, about half of which is imported, medicines and other essentials, some of which already are scarce.

The Santander Central Hispano investment bank has warned that Venezuela's economy could contract as much as 40 percent in the first quarter of 2003. It shrank by an estimated 8 percent in 2002. Unemployment is 17 percent and inflation, fueled by a 46 percent devaluation of the bolivar last year, is 30 percent.

www.tribnet.com

The Associated Press

Gas prices rose nearly one and a half cents per gallon over the past two weeks, an industry analyst said Sunday.

The average weighted price for gas nationwide, including all grades and taxes, was about $1.52 per gallon Friday, according to the Lundberg Survey of 8,000 stations nationwide. Gas cost just over $1.50 a gallon on Jan. 3, the date of the last Lundberg Survey.

Contributing to the price rise was the continuing oil production strike in Venezuela, a fear of war against Iraq, the intense cold weather on America's East Coast, which is prompting some refiners to produce more heating oil, and the addition of a costlier gasoline additive in California, Trilby Lundberg said. (Published 12:30AM, January 27th, 2003)

www.theledger.com The Associated Press

The top business news from The Associated Press for the morning of Monday, January 27, 2003:

Worm Attack Exposes Inadequate Security NEW YORK (AP) - This weekend's Internet attack has security experts worried that too many system managers are only fixing problems as they occur, rather than keeping their defenses up to date. The worm that crippled tens of thousands of computers worldwide, congested the network for countless others and even disabled Bank of America cash machines took advantage of a vulnerability in some Microsoft Corp. software that had been discovered in July.

Venezuela Leader Warns of Price Controls CARACAS, Venezuela (AP) - President Hugo Chavez said he would implement price controls to go along with limits on the trade in foreign currencies as Venezuela's economy heads for a tailspin stemming from an opposition strike, which entered its ninth week Monday. "So that these (currency) controls do not hurt the poor, we will institute price controls," Chavez said Sunday in Porto Alegre, Brazil, at the World Social Forum. He did not give details of the controls.

Retailers Form Digital Music Venture LOS ANGELES (AP) - Six retail record store chains - hurting from competition from CD burning, online music and large discount stores - are teaming to offer consumers digital music downloads in their stores and over the Internet. The stores have formed a joint venture called Echo that will provide technology and allow them to offer individual tracks for downloading to portable devices and computers.

Progress Reported on Cheaper AIDS Drugs DAVOS, Switzerland (AP) - Global business leaders reported progress on making cheaper AIDS drugs available to poor nations as Microsoft founder Bill Gates made another contribution to health in the developing world - announcing a $200 million grant to fund medical research. Meeting at an exclusive Alpine resort, delegates to the World Economic Forum held talks on how to ensure access for poor countries to affordable copies of vital drugs while respecting the patent rights of pharmaceutical companies.

Super Bowl Advertisers Stick With Humor NEW YORK (AP) - Advertising's auteurs kept it quirky on Super Bowl Sunday, with humor a prime ingredient in most commercials as Americans weary of war talk and a gloomy economy were given a chance to chuckle. Brokerage Charles Schwab noted the fear of Wall Street's three years of declines, offering a man sprinting through his neighborhood, pursued by an unseen foe. The man is finally cornered in a backyard by the mail carrier - delivering a brokerage statement.

Suit Accuses Philip Morris of Deception EDWARDSVILLE, Ill. (AP) - Sharon Price switched from smoking regular cigarettes to brands labeled "light" when she was pregnant in the 1970s. "I knew the better choice was to quit, but I thought I was reducing my risk," the pack-a-day smoker said.

Questions Surround the Future of Fiat ROME (AP) - Watching Giovanni Agnelli's health became a macabre stock market hobby in recent months: When his life prognosis dimmed, Fiat stock rose. Traders heaped pressure on the Fiat empire overseen by Agnelli to get out of its losing car business. But the ailing Agnelli didn't pull out.

Gold Prices LONDON (AP) - Gold bullion opened Monday at a bid price of $372.50 an ounce, up from $366.30 late Friday.

Japan Markets TOKYO (AP) - The Nikkei Stock Average fell 122.18 points to close at 8,609.47 on Monday.

Dollar-Yen TOKYO (AP) - The dollar traded at 117.82 yen on Monday, down 0.03 yen from Friday.

Last modified: January 27. 2003 3:54AM