MercoPress. South Atlantic News Agency

Gold, oil up, yet rate fears weigh

Gold hit a fresh 25-year high on Tuesday as oil neared a record, pushing shares of Asian commodity firms like BHP higher, but broader stock gains were checked by fears that high oil prices would hurt economic growth.

U.S. crude oil futures jumped 35 cents to $70.75 a barrel, their highest level in nearly eight months, on worries that mounting tension between the West and Iran over Tehran's nuclear ambitions could disrupt oil supplies in the Middle East.

Gold, silver and copper also advanced, while the dollar steadied after tumbling on Monday on a growing view that the U.S. Federal Reserve could soon end its tightening cycle.

With rising oil prices stoking fears of inflation, investors were awaiting minutes of the Fed's March meeting due later in the day for clues on whether the central bank would keep raising interest rates beyond an expected increase in May, traders said.

Markets will get a snapshot of the U.S. inflation picture when the U.S. producer price index for March is released later in the day, followed by the consumer price index on Wednesday.

Japan's benchmark Nikkei average ended nearly 1.4 percent higher at 17,232.86 as investors bought shares in Nippon Mining Holdings Inc. and other resource-related firms and returned to battered financial stocks. Nippon Mining jumped 5.8 percent to 1,119 yen.

"High oil prices are certainly a burden for companies... but the market looks quite buoyant. I think investors are scooping up stocks on expectations that corporate earnings will be strong," said Tatsuo Nishimura at Meiji Dresdner Asset Management. Firmer commodity prices also fueled gains in Australia, pushing the index up 1.3 percent. The world's top miner, BHP Billiton Ltd./Plc., rose 2.8 percent to A$30.58 after hitting a record high, while Woodside Petroleum, the nation's top independent oil producer, climbed 3.9 percent to A$48.61.

The increases helped boost MSCI's index of non-Japan Asian shares by nearly 1 percent.

Hong Kong's blue-chip index rose 1.1 percent and Singapore crept higher, while stocks in Taiwan wobbled on oil price fears and ended the day slightly lower.

South Korea's main index struggled 0.3 percent higher as investors feared rising oil prices and interest rates would dampen global consumer demand, depressing shares of exporters such as LG Electronics Inc., which fell 0.9 percent.

But Korean oil refiners rose on hopes that higher fuel prices would boost profit margins. SK Corp., the country's biggest refiner, added 2.7 percent to 71,300 won.

Oil creeps up, copper jumps

Oil prices inched closer to a record high of $70.85 set last August as fears grew of possible military action against Iran and a major Nigerian supply outage dragged into a third month.

Iran said on Monday it would not be bullied or threatened by the United States into stopping its uranium enrichment work but added it would cooperate with the U.N. nuclear watchdog.

Fears of a disruption of supplies from the world's fourth-largest oil exporter have helped drive oil prices more than 20 percent higher since mid-February. Western powers are worried that Tehran may be planning to build an atomic bomb.

Gold climbed to $617.75/618.50 from $613.20/614.00 in late U.S. trade as investors continued to chase the yellow metal as they look for safe havens against inflation. It later retreated to around $615.

"Gold could do no wrong today, it was all buyers at one stage," a bullion dealer in Sydney said.

Copper prices jumped over 5 percent to a record $6,470 a tonne as funds' appetite for commodities showed no signs of abating.

The dollar was around 117.80 yen by mid-afternoon, little changed from late New York trade on Monday. The euro was at $1.2260 up from $1.2250.

U.S. stocks fell on Monday as surging oil and gold prices heightened fears about inflation and overshadowed optimism about corporate profits.

The Dow Jones industrial average fell 0.57 percent, while the tech-heavy Nasdaq dropped 0.64 percent.