Gold price shines, copper melts on China, Ukraine fear

LONDON (AFP) - Gold prices struck six-month highs this week but copper futures tumbled to the lowest level in nearly four years on market concerns over slowing Chinese economic growth.

Investors sought haven investments such as gold also because of the Ukraine crisis and as the euro spiked to a 29-month peak at almost $1.40 (S$1.77) on Thursday.

Crude oil futures meanwhile dropped also on China growth worries, while tight supplies continued to lift the value of soft commodities coffee and cocoa.

Gold extended its recent run higher, reaching a six-month high at US$1,388.11 an ounce on Friday. Gold is regarded as a safe investment in times of economic or political uncertainty.

"It is not just the Chinese concerns that are driving gold prices higher. The situation in Ukraine ... is getting worse," noted Fawad Razaqzada, analyst at traders

China on Thursday said that its industrial output rose 8.6 per cent year-on-year in January and February, the slowest rate since April 2009.

At the same time retail sales, a key indicator of consumer spending, were up 11.8 per cent, but also the worst performance for several years.

The data added to speculation that the Chinese economy - a crucial driver of regional and global growth - is slowing and comes days after officials announced a surprise trade deficit in February.

Elsewhere, the United States and Russia on Friday failed to resolve a Cold-War-style crisis sparked by Moscow's military intervention in Crimea and the Ukrainian peninsula's weekend referendum on joining Kremlin rule.

By late Friday on the London Bullion Market, the price of gold jumped to US$1,385 an ounce from US$1,335.25 a week earlier.

Silver dipped to US$21.36 an ounce from US$21.38.

On the London Platinum and Palladium Market, platinum gained to US$1,478 an ounce from US$1,474.

Palladium grew to US$780 an ounce from US$776.

Copper prices slumped for a second week running on poorly-received data from China, the world's top consumer of base or industrial metals, striking the lowest level for almost four years.

Copper sunk to US$6,376.25 a tonne, a depth not reached since June 2010.

Lead and tin struck eight-month lows.

"Over the past two weeks, fears of a significant slowdown in Chinese economic growth have clearly re-emerged as credit conditions in the country have tightened and commodity prices have sharply declined," said analysts at Jefferies financial group.

By Friday on the London Metal Exchange, copper for delivery in three months tumbled to US$6,469 a tonne from US$6,854 week earlier.