Money and Metals

The Associated Press reports on currencies. "The dollar fell against the euro on Thursday after the European Central Bank signaled that it would increase its key interest rate in March to stem inflation threats. However, the U.S. currency rose against the yen and British pound. The 13-nation euro bought $1.3038 in afternoon New York trading, up from $1.3006 in New York late Wednesday, after the ECB left its interest rate unchanged at 3.5 percent but set the stage for a March increase."

"Bank President Jean-Claude Trichet warned that 'strong vigilance remains of the essence so as to ensure that risks to price stability over the medium term do not materialize,' language that, in the past, has signaled a rate rise the following month."

"The British pound fell to $1.9580 from $1.9692 after the Bank of England also kept its key interest rate unchanged at 5.25 percent. The dollar rose to 121.05 yen from 120.66 yen on Wednesday as talk faded that the Japanese currency would be a key topic at this weekend's meeting of the Group of Seven finance ministers."

"In other trading, the dollar bought 1.2461 Swiss francs, up from 1.2417 late Thursday, and 1.1824 Canadian dollars, down from 1.1852."

"Oil prices surged by $2 a barrel late in the day Thursday, as energy traders rushed back into the market amid frigid temperatures in the United States and political tension overseas."

"Light, sweet crude for March delivery rose $2 to settle at $59.71 a barrel in late trading on the New York Mercantile Exchange, after peaking at $59.87. It was the highest settlement price since Dec. 29, 2006, when crude closed at $61.05 a barrel."

"Factors such as renewed warnings out of Iran, violence in Nigeria, and frigid temperatures in the United States kept prices afloat Thursday — leading traders to believe that $60 a barrel may not be as insurmountable as they thought."

"'This is trend-chasing. It's very nervous, short-term, speculative trading. People were guessing that a top was in the market, and now they've been disappointed that prices didn't fall further,' said Tim Evans, energy analyst at Citigroup Global Markets."

From MarketWatch. "Gold futures closed above $660 on Thursday, underpinned by a rise in energy prices and a fall of the U.S. dollar against the euro. Gold for April delivery closed up $5.50 at $662.80 an ounce on the New York Mercantile Exchange."

"Blanchard's CEO, Donald Doyle, Jr., said in a note to clients: 'A weak U.S. dollar, increasing oil prices, and ever-present geopolitical tensions will continue to affect precious-metals prices, but analysts at Blanchard and Company, Inc. say that any market correction will present investors with a buying opportunity as they expect prices to surge due to continuous improvement in market fundamentals.'"

"The market continues to get more information each day on slumping mine supply across the globe, additional de-hedging, slowing central-bank sales and new central-bank purchases, Doyle said, and these are major factors that will push gold to last year's highs within the next few weeks."

"Other metals prices were mixed. Silver closed up 6 cents at $13.77 an ounce. Platinum declined $4.70 to end at $1,198.30 an ounce. Palladium closed down $4.20 at $341 an ounce."