Gold price surges to fresh six-year high

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.