Gold climbs as dollar surrenders gains

LONDON - Gold rose on Monday, building on the gains of the last two weeks, as the euro rose towards $1.50 (U.S.) and oil prices reached a new 12-month high near $80 a barrel.

The precious metal could be set to target new record highs above the peak of $1,070.40 an ounce it set last week if the U.S. dollar continues to weaken against the euro, boosting interest in the metal as an alternative asset, dealers said.

Spot gold was bid at $1,054.70 an ounce at 0928 GMT against $1,050.80 late in New York on Friday. U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $4.20 to $1,055.70 an ounce.

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Among other precious metals.

Spot silver was at $17.44 an ounce against $17.41, while platinum was at $1,346 an ounce against $1,341 and palladium at $327 against $326.50.

Palladium prices have risen some 9 per cent in the last four month, beating gold's 5 per cent gains and a 1.4 per cent rise in platinum prices in the same period.

The metal is benefiting from hopes industrial demand for the autocatalyst material will recover if an economic recovery picks up steam, fears over the availability of stockpiled Russian metal and firm investment buying.

ETF Securities' palladium-backed exchange-traded commodity added nearly 12,000 ounces of metal to its holdings last week, lifting them 2.3 per cent to a record 540,566 ounces.

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Copper gains, uncertainty restrains prices

LONDON - Copper rose on Monday, as the market priced in an end to consumer de-stocking, but uncertainty about future economic and demand prospects is expected to dampen investor enthusiasm.

Benchmark copper on the London Metal Exchange was trading at $6,285 (U.S.) a tonne at 0918 GMT compared with $6,240 at the close on Friday. The metal used in power and construction earlier hit a session high of $6,324 a tonne.

Analysts say talk over the last few days - during LME Week - that consumers may have used up their stocks had boosted sentiment in the industrial metals market, which for some weeks now has been looking for direction.

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Aluminum was trading at $1,907 a tonne from $1,905 on Friday. The metal used in transport and packaging has in recent months been supported by financing deals which have tied up about 70 per cent of LME stocks until May 2010.

"(The risk to aluminum prices is) financing deals are broken and more metal becomes available," BofA Merrill Lynch said in a note.

"Smelters will need to show production restraint in the coming years to restore a degree of normality on the aluminum market."

Nickel,Steel ingredient was at $18,900 a tonne from $18,700 on Friday. L

Lead was at $2,210 from $2,204.

Zinc was at $2,054 from $2,053.

"It is possible to look back over (LME week) and pick up a distinct, but perhaps cautious, sense of optimism," said David Wilson, analyst at Societe Generale.

There was a clear sense during the week that most ... felt that the worst of the current cycle was well past."

Tin was at $14,500 a tonne from $14,550 on Friday.

Worries about short term tin supplies have been fuelled by a dominant position controlling more than 90 per cent LME stocks and cash contracts.

That is reflected in the premium for cash material over the three-month contract, which at around $400 a tonne is down from $730 on Sept. 22, but it is still nearly double the levels seen at the end of August.

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Oil hits 2009 high before retreating

London - Oil prices jumped above $79 a barrel to a 2009 high Monday before falling back as investors looked to the corporate earnings of big U.S. retailers this week for signs consumers may be regaining confidence.

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