Oil price slips, taking gold, platinum with it

A declining oil price - to about $127 (R976) a barrel - took other commodities down with it yesterday.

A declining oil price - to about $127 (R976) a barrel - took other commodities down with it yesterday.

By mid-afternoon, gold hit a two- week low of $888,90 (R6837).

While gold fell about two percent, platinum's slide was three percent. Other commodities also dipped.

Reuters reported that oil's drop reflected "growing signs Asian demand could start to falter as consumer nations look to cut subsidies by raising fuel prices".

Yesterday oil was almost six percent off last week's record high of $135,09 (R1037).

According to reports, the oil price is hitting people across the board. Even in developed countries, demand has come under pressure.

"There are signs that soaring energy prices are now even starting to cause ripples in the booming Asian economies," Edward Meir at MF Global told Reuters.

Despite the recent drop in price, fuelled also by Indonesia's exit from the Organisation of Petroleum Exporting Countries (Opec), it is generally expected that the price, which is up nearly 40percent this year, will continue to climb.

"Oil prices have continued to fall following the release of poor (US) economic data and fears that high fuel prices may curb demand," said analysts at energy consultancy John Hall Associates.

Following reports that China had overtaken South Africa as the biggest gold producer, the China Gold Association said it would do so this year. - Staff reporter

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