Gold Price Above $900, Oil Sets Record Near $128
May 16, 2008 -- Gold prices have hit $905 an ounce on the New York exchange
market, rising from $882 late last week. Rapidly rising oil prices, which
reached $128 a barrel, have sparked a buying spree. Silver has also risen in
price, reaching $17 an ounce. Earlier this year gold prices broke the $1,000 an
ounce barrier before falling back again. Financial analysts believe gold could
hit $2,500 an ounce within a few years.
THE RISING PRICE OF OIL isn't just swelling Americans' energy bills — it's also
holding back their stock portfolios.
Wall Street got some seemingly auspicious signs last week about home
construction and consumer level inflation. But with oil climbing to new
records, and more reports expected this week on rising prices and the housing
market, investors are holding on to a conservative stance.
Oil's stubborn trek to record highs is a major reason why investors have yet to
push the major indexes into positive territory for the year. Just this month,
crude has so far tacked on about $13 to breach $127 a barrel, while the price
tag on a gallon of gasoline for the average U.S. driver has soared 17 cents to
nearly $3.79.
Those price surges cast an air of skepticism over last week's report from the
Labor Department showing a modest 0.2 percent uptick in consumer prices in
April.
Meanwhile, the Commerce Department's upbeat report on housing starts also met
with some doubt among investors, particularly because the huge rise was due
mostly to apartment construction, which can vary widely from month to month.
Still the market, betting that better times are not that far off, finished the
week with a solid advance. The Dow Jones industrial average rose 1.89 percent,
while the Standard & Poor's 500 index gained 2.67 percent and the Nasdaq
composite index picked up 3.41 percent
"So are we at an inflection point in housing right now? Very possibly. But
let's be clear here. Nothing in the data suggests we're about to see a sharp
rebound," wrote Bernard Baumohl of the Economic Outlook Group LLC in a research
note.
We are still looking for oil to ease off and for the dollar to rise off
the floor. Without those moves, even if we have good earnings for Q1,
we won’t be able to assume the consumer can hold up in Q2. (APP)
