Crude Oil Rises as IEA Bolsters Demand Forecast, Dollar Slides

Sept. 11 (Bloomberg) -- Crude oil is poised for its first weekly gain in three after the International Energy Agency increased its 2010 estimate for global demand for a second consecutive month and the dollar traded near a nine-month low.

World oil demand is likely to average 85.7 million barrels a day next year, according to a monthly report from the Paris- based agency yesterday. That’s 450,000 barrels a day more than estimated in August. The dollar was near its lowest level since Dec. 18 against the euro on speculation reports today will show China’s factory output gained and exports dropped at a slower pace, reducing demand for the U.S. currency as a refuge.

“The IEA’s positive demand forecast is going to support prices,” said Chip Hodge, who oversees a $9 billion natural- resource bond portfolio as managing director at MFC Global Investment Management in Boston. “Demand is set to rise anyway because of the onset of winter.”

Crude oil for October delivery fell 2 cents to $71.92 a barrel on the New York Mercantile Exchange at 7:26 a.m. Singapore time. Prices have gained 5.7 percent this week and are up 61 percent this year.

The change in the forecast “is quite substantial,” Ian Fyfe, the head of the IEA’s oil industry and markets division, said in a telephone interview from Paris yesterday. “It is premised on stronger North American and Chinese demand. There are still a lot of question marks, in particular about industrial demand.”

The agency advises its 28 members on energy policy and was set up in response to the 1974 Arab oil embargo.

Buffeted Market

“The more dynamic emerging markets are leading this upward revision by the IEA,” said Harry Tchilinguirian, senior oil analyst at BNP Paribas SA in London. “What’s driving this market on a day-to-day basis is what other asset markets are doing. It’s buffeted between forex and equities.” The Standard & Poor’s 500 Index rose 1 percent to 1,044.14 and the Dow Jones Industrial Average increased 0.8 percent to 9,627.48.

Prices also advanced after U.S. oil inventories dropped more than expected and OPEC maintained output quotas.

The Organization of Petroleum Exporting Countries agreed to maintain output quotas at 24.845 million barrels a day and will urge members to adhere to their targets, OPEC Secretary-General Abdalla El-Badri said in a briefing yesterday.

OPEC’s decision to maintain current production targets “is quite sensible and we welcome this decision,” the IEA’s executive director, Nobuo Tanaka, told reporters in Lisbon yesterday. “The global economic situation is probably improving and we want to maintain it.”

Third Meeting

The OPEC meeting, which ended early yesterday in Vienna, was the third this year at which the group left production quotas unchanged. OPEC is urging members to adhere more closely to its output targets. The 11 members bound by quotas pumped 26.055 million barrels a day in August, according to a Bloomberg News survey, which indicates quota compliance of about 71 percent.

“OPEC is happy because it doesn’t have to do anything,” Hodge said. “Most people, both producers and consumers, seem to be content with prices at this level.”

Brent crude oil for October settlement increased 3 cents to end the session at $69.86 a barrel on the London-based ICE Futures Europe exchange.

U.S. stockpiles of crude oil fell 5.91 million barrels to 337.5 million, an Energy Department report showed. Supplies were estimated to decline by 1.85 million barrels, according to the median of 16 responses from analysts in a Bloomberg News survey.

Fuel Stockpiles

Gasoline inventories rose 2.07 million barrels to 207.2 million last week, the first gain in seven weeks, the department said. Supplies were forecast to drop by 1.5 million barrels, according to a Bloomberg News survey. Demand for the fuel fell 2.1 percent to an average 9.28 million barrels a day.

Stockpiles of distillate fuel, a category that includes heating oil and diesel, climbed 1.99 million barrels to 165.6 million, the highest since January 1983.

Gasoline for October delivery declined 2.45 cents, or 1.3 percent, to settle at $1.8036 a gallon in New York. Heating oil for October delivery fell 0.59 cent, or 0.3 percent, to end the session at $1.7885.

Gold Little Changed as Dollar Slips Against Euro; Silver Gains

Sept. 10 (Bloomberg) -- Gold was little changed, paring an earlier decline, as the dollar slipped against the euro, boosting the metal’s appeal as an alternative asset. Silver rose.

The dollar sank as much as 0.4 percent against the European currency, erasing an earlier gain. Gold fell as much as 1.4 percent before rebounding. On Sept. 8, gold, which tends to rise when the dollar weakens, reached $1,009.70 an ounce in New York, the highest since March 2008. The price briefly topped $1,000 today, after the day’s settlement, as the greenback declined.

“Gold is gaining ground on the U.S. dollar weakness today,” Miguel Perez-Santalla, a Heraeus Precious Metals Management sales vice president in New York, said by e-mail.

Gold futures for December delivery slipped 30 cents to $996.80 an ounce on the New York Mercantile Exchange’s Comex division. The most-active contract has surpassed $1,000 in each of the past three days.

In London, bullion for immediate delivery rose $3.95, or 0.4 percent, to $996.24 an ounce at 7:10 p.m. local time, after falling as much as 1 percent earlier. Spot prices advanced 4.3 percent this month through yesterday as the euro gained 1.6 percent against the U.S. currency.

“A deeper pullback in the dollar could keep prices supported, but for sustained gains we shall need to see renewed risk aversion,” Andrey Kryuchenkov, a VTB Capital analyst in London, wrote today in a note.

Equity Indexes Rise

U.S. equity indexes advanced, a sign that investors may have a higher tolerance for risk. The benchmark Standard & Poor’s 500 Index rose as much as 1 percent, extending a September gain of 1.2 percent through yesterday.

The Bank of England plans to keep buying as much as 175 billion pounds ($291 billion) in assets to cement the economy’s recovery, according to a statement today. The U.K. central bank kept its main interest rate at 0.5 percent. Some analysts say government spending may spark accelerating inflation and currency debasement.

“Gold will remain well-supported, driven by dollar weakness, demand from China and inflation expectations,” Liam Fitzpatrick, a Citigroup Inc. analyst in London, said today in a report. The metal will trade between $900 and $1,000 an ounce, he predicted.

Ian Williams, the chief executive officer of Charteris Portfolio Managers in London, predicted gold will trade from $1,250 to $1,300 an ounce within the next six months.

“Sooner or later, you get a situation where everything is going up,” Williams said in a Bloomberg Television interview. “Gold is going up, because it’s liquidity driven.”

Silver Climbs

Silver futures for December delivery gained 20 cents, or 1.2 percent, to $16.70 an ounce. The most-active contract surged to a 13-month high of $16.86 on Sept. 8 and is up 20 percent in the past three weeks, pushing its 2009 gain to 48 percent.

Silver is “vulnerable to one of its idiosyncratic collapses,” John Reade, UBS AG’s head metals strategist in London, said today in a note. “We recommend taking any profits in silver.”

Platinum for October delivery declined $1.70, or 0.1 percent, to $1,289.70 an ounce in New York, up 37 percent this year. Credit Agricole SA’s Calyon unit in London raised its 2010 price forecast for the metal by 8.3 percent to $1,300 an ounce, citing improving economic growth. Palladium for December delivery declined $1.60, or 0.5 percent, to $293.45 an ounce.

Outperforming Gold

“We expect silver and platinum to continue to outperform gold as economic conditions improve,” Citigroup’s Fitzpatrick said in his report. Platinum, used in automotive emissions- control parts, may rise toward $1,400 an ounce by the end of the year, he wrote, citing “potential restocking in the global auto market and curtailment of supply.”

Automakers account for about 60 percent of platinum and palladium use, according to metals researcher and refiner Johnson Matthey Plc.

Tomorrow, the New York Mercantile Exchange plans to observe a moment of silence to commemorate the events of Sept. 11, 2001. In a statement today, President Barack Obama asked all Americans to pause in their activities at 8:46 a.m. New York time to honor the victims of the terrorist attacks eight years ago.

Dollar Near Nine-Month Low Against Euro Before Chinese Reports

Sept. 11 (Bloomberg) -- The dollar traded near a nine-month low against the euro on speculation reports today will show China’s factory output gained and exports dropped at a slower pace, reducing demand for the U.S. currency as a refuge.

The euro may approach a two-week high against the yen before an Italian report today that economists said will show industrial production rose in July after dropping in June, adding to signs Europe’s recession is easing. The pound was near a one-month high against the dollar after the Bank of England yesterday kept its bond-buying program unchanged in a sign policy makers believe the economy is recovering.

“Assuming China’s data will come out stronger than expected, that’s going to keep the U.S. dollar under pressure across the board,” said Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney. “Risk appetite should be pretty well underpinned.”

The dollar traded at $1.4578 per euro as of 9:10 a.m. in Tokyo from $1.4582 yesterday in New York, when it dropped to $1.4613, the weakest level since Dec. 18. The euro was little changed at 133.64 yen from 133.76 yen. The dollar was at 91.67 yen from 91.73 yesterday when it fell to 91.44 yen, the lowest level since Feb. 16.

Sterling traded at $1.6652 from $1.6651 yesterday, when it climbed to $1.6687, the strongest level since Aug. 10. The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners including the euro, yen and pound, was at 76.819 from 76.827 yesterday.

Demand for the dollar may decline as economists surveyed by Bloomberg News said China’s industrial production gained 11.8 percent in August from a year earlier. The statistics bureau will release the report at 10 a.m. in Beijing.

China’s Exports

China’s exports may have dropped 19 percent in August from a year earlier, the slowest decline since March, a separate Bloomberg survey showed before today’s report.

The Bank of England’s nine-member Monetary Policy Committee decided to keep buying as much as 175 billion pounds ($291 billion) of assets to help the economy’s recovery. Policy makers also kept the main rate at a record low of 0.5 percent.

“The market was concerned that the BOE may introduce additional asset purchases,” said Shaun Osborne, chief currency strategist at TD Securities Inc. in Toronto. “The BOE did nothing. There’s a window of opportunity for the pound to pick up some ground in the next two months.”

The euro add to gains as the national statistics office in Rome is forecast to report today that industrial production in Italy gained 0.4 percent in July after declining 1.2 percent in June, according to a Bloomberg survey.

The yen was little changed after a government report today showed Japan’s economy grew less than initially estimated in the second quarter.

Gross domestic product expanded at an annual 2.3 percent pace in the three months ended June 30, according to revised figures from the Cabinet Office in Tokyo. Economists surveyed by Bloomberg News forecast a 3.7 percent expansion, unchanged from the preliminary report.

FKLI Commentary on 11/09/09

FKLI Sep Futures contract rose 5.5 points higher to close at 1206 levels as compare to previous trading session to with a total of 6,280 lots traded in the market. FKLI fall back lower in the second trading session despite Dow Jones electronic and regional indices were closed firm during the trading sessions.

Technically, FKLI retrace towards 50% Fibonacci support levels at 1206 regions after tested the resistance levels at 1216; 38.1% Fibonacci projection levels. Based on our technical knowledge, our opinion suggests FKLI would meet great interest around support levels at 1200 and 1196 regions. Failure to hold above the support levels shall indicate great selling pressure. Traders were advice to hold long cautiously, make sure the support were not violated before and after entry position while be cautious around resistance level 1216 and 1223 levels.

FCPO Commentary on 11/09/09

CPO 3rd month Nov futures contract rose marginally RM5 higher as compare to previous trading sessions to close at RM2184 with a total of 12,256 lots traded in the market. CPO price was traded wild to find lower support after manage to challenge new height during trading session despite soybean oil electronic trading session were traded within tight range. Sharp fall in CPO price was mainly due to MPOB report that leads to bearish interpretation.

Technically, CPO price starts to traded lower after manage to meet 78.6% Fibonacci projection at RM2240 regions and followed by challenge support levels at RM2150; 78.6% Fibonacci retrace levels despite manage to false break lower towards RM2135 regions. Based on our technical interpretation, our opinion suggests CPO price would trade higher in the coming trading to challenge next height at RM2285 and RM2330, next resistance levels. Traders were advice to hold long position in the coming trading session provided support levels at RM2150 and RM2135 were not violated during trading sessions.

Malaysian Palm Oil Stockpiles at Six-Month High as Exports Drop

Sept. 10 (Bloomberg) -- Palm oil stockpiles in Malaysia, the world’s second-largest producer, rose to a six-month high in August after production climbed and exports declined.

Inventories of the world’s cheapest edible oil gained 6.2 percent to 1,415,109 metric tons in August from July, according to a statement from the Malaysian Palm Oil Board today. That’s the highest level since February.

The rise in stockpiles may help to arrest a rally in palm oil futures, which have gained 31 percent this year on the Malaysia Derivatives Exchange amid concern that drought damage to the soybean crop in South America has cut oilseed supplies. Both palm oil and soybean oil may be used for cooking.

Malaysia’s palm oil production rose 0.2 percent in August on month to 1,494,764 tons, the highest level since a record set in November last year, according to today’s data. Exports fell for the first time in four months, dropping 9.5 percent to 1,316,466 tons, the report showed.

OPEC Agrees to Keep Oil Production Quotas Unchanged

Sept. 10 (Bloomberg) -- OPEC said it will keep oil production quotas unchanged, banking on a recovery in the world economy to maintain prices near today’s $71 a barrel.

The Organization of Petroleum Exporting Countries agreed to maintain total production quotas at 24.845 million barrels a day, and will urge members to adhere to their targets, OPEC Secretary-General Abdalla El-Badri in a press briefing. It’s the third time this year group has met without revising the figure.

“Holding production was the prudent thing to do,” Jason Schenker, president of Texas-based consultants Prestige Economics LLC, said in an interview in Vienna.

The producer group, which accounts for about 40 percent of global crude supply, had been expected by analysts and most ministers to keep output unchanged after prices rallied. Oil has gained 61 percent this year, last month reaching the $75 level identified by Saudi King Abdullah as satisfactory for consumers and producers.

Crude oil advanced for a fourth day and has gained 61 percent this year. The contract for October delivery traded up 31 cents, or 0.4 percent, at $71.67 a barrel on the New York Mercantile Exchange as of 8:48 a.m. in Singapore.

“This $65 to $75 range seems amenable to both producers and consumers,” Schenker said. “If they’d cut when production is above quotas, and prices are amenable, it may not have been received well.”

Three-Hour Talks

Algerian Oil Minister Chakib Khelil and Qatari Energy Minister Abdullah bin Hamad al-Attiyah confirmed the decision as they left OPEC’s headquarters at about 1 a.m. Vienna time today, after closed door talks lasting three hours.

“OPEC has played its cards very well,” considering that there has been a significant economic slowdown in some of the major consuming nations and regions, said Toby Hassall, a research analyst at CWA Global Markets Pty in Sydney. “They were probably correct in not cutting output further at the beginning of this year. They have to be relatively happy with where prices are”

OPEC agreed late last year to cut production targets by 4.2 million barrels a day after prices crashed more than $100 a barrel from a record set in July 2008. Oil dipped to $32.40 in December before recovering this year. In the past five months, production has risen from the 11 OPEC members bound by quotas.

The 11 members bound by quotas pumped 26.055 million barrels a day in August, according to estimates in a Bloomberg survey, which indicates quota compliance of about 71 percent.

Compliance Improving

Compliance with existing production quotas is improving and prices may rise further by the end of the year, Algeria’s Khelil said. Late yesterday, Ali al-Naimi, the oil minister for Saudi Arabia, OPEC’s biggest producer, told reporters “we are enjoying a good, fair price” for oil, so any slippage in compliance with production quotas is not a concern while prices are “perfect.”

Ministers from several OPEC member states including Kuwait and Venezuela had said this week they didn’t expect any change in allowed production volumes. Quotas were last changed in December. All 26 analysts surveyed by Bloomberg News last week also forecast no change in quotas.

Only Saudi Arabia, Kuwait and Qatar pumped less than their target last month, according to Bloomberg estimates. Iran, Angola and Venezuela were the biggest quota busters. Iraq is the only OPEC member which does not have production limits.

“Everybody should adhere to his production allocation,” OPEC’s el-Badri said. There are “positive signs” oil demand will pick up in 2010, he added.

Oil Demand Rising

World oil demand is expected to rise 1.6 percent next year to 85.25 million barrels a day, according to a report last month by the Paris-based International Energy Agency, led mainly by gains in developing nations.

OPEC members will make $559 billion in net sales from crude exports this year, down 42 percent from 2008, the U.S. Energy Department reported. The figure was little changed from last month’s forecast of $555 billion. OPEC made $971 billion last year and is forecast to make $675 billion in 2010.

OPEC will meet next in Luanda, Angola, on Dec. 22, and again in Vienna on March 17 next year, the group said.

Gold May Reach Record on Weaker Dollar, Survey Shows

Sept. 9 (Bloomberg) -- Gold, trading near an 18-month high in New York, may advance to a record before the end of the year as investors seek to hedge against a weaker dollar and possible inflation, a survey showed.

Bullion futures will surpass the $1,033.90 an ounce reached in March 2008, according to 10 of 12 traders, investors and analysts surveyed by Bloomberg. Gold for December delivery climbed as high as $1,009.70 an ounce on the New York Mercantile Exchange’s Comex unit yesterday after breaching $1,000 for the first time since Feb. 20.

Governments have cut interest rates and the Group of 20 nations have pledged about $12 trillion to combat the first global recession since World War II, International Monetary Fund data show. The U.S. Dollar Index, a six-currency gauge of the dollar’s strength, slid to more than an 11-month low today.

“Extremely loose fiscal and monetary policies are likely to create an inflation headache down the road,” said Mark O’Byrne, managing director of broker GoldCore Ltd. in Dublin. “With the dollar’s global reserve status being increasingly questioned, the dollar is likely to fall further in coming months and lead to further diversification into gold.”

December gold futures slipped 70 cents, or 0.1 percent, to $999.10 an ounce at 10 a.m. in New York today. The metal may climb as high as $1,200 this year, O’Byrne said in an e-mail.

Gold Trust

The SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, reached a record 1,134.03 metric tons on June 1. The fund, which held 1,077.63 tons as of Sept. 8, overtook Switzerland as the world’s sixth-largest gold holding. Bullion held in ETF Securities Ltd.’s exchange-traded products reached a record 8.066 million ounces (250.9 tons).

Barrick Gold Corp., the world’s largest producer of the metal, said it plans to record $5.6 billion in third-quarter costs to eliminate fixed-price gold-sales contracts, or hedges, as it bets that bullion prices will climb. The company said it had contracts for 9.5 million ounces of gold as of Sept. 7.

The decision will put pressure on Johannesburg-based AngloGold Ashanti Ltd., which holds most of the industry’s remaining forward sales, to do the same, said John Reade, head of metals strategy at UBS AG in London. Mark Cutifani, AngloGold’s chief executive officer, declined to say in an interview yesterday whether he will accelerate efforts to close out the company’s hedges.

Down to $950?

Gold producers have been eliminating hedges after eight years of successive price increases left them with contracts to sell gold below market prices.

The metal may fall as low as $950 an ounce before rebounding to $1,200 “toward the end of the year,” Ashraf Laidi, chief market strategist at CMC Markets in London, said in a Bloomberg Television interview yesterday.

Bullion may climb as high as $1,150 an ounce as the dollar weakens, inflation potentially accelerates and investors switch from energy to precious metals, Investec Asset Management said today in a report.

President Barack Obama has increased U.S. marketable debt to an unprecedented $6.78 trillion as he borrows to spur the world’s largest economy. Goldman Sachs Group Inc. predicts that the country will sell about $2.9 trillion of debt in the two years ending next September.

Consumer Prices

“Markets believe that the Federal Reserve is not going to withdraw liquidity fast enough and there will be inflation,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois.

U.S. consumer prices will drop 1.6 percent this quarter from a year earlier before rising 1.4 percent in the fourth quarter and 2 percent in each of the subsequent two quarters, according to the median estimate of economists surveyed by Bloomberg News.

Gold futures dropped 14 percent in the six weeks after they last reached $1,000. Investors should avoid buying the metal at that level because investment demand is weaker than it was earlier this year, UBS’s Reade said in a note yesterday.

Demand in India, the world’s largest buyer of the metal, is about 5 percent to 10 percent of last year’s peak, partly because of drought in parts of the country, he said. The bank maintained its one-month and three-month forecasts for the metal at $950 and $1,000 an ounce respectively.

Gold may reach $1,050 in the “short term” before falling, Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said in an e-mail.

“The market keeps talking inflation, but the price of gold is already inflated,” he said. “I won’t put my money into gold, and I know many traders and their families that are rummaging their jewelry looking for scrap to sell to take advantage of these high prices.”

Scrap sales were a record 1,218 tons last year, increasing supply, according to London-based researcher GFMS Ltd. Second- quarter sales may have shrunk to 350 tons, more than 40 percent less than in the preceding three months, GFMS said July 31.

FKLI Commentary on 10/09/09

FKLI Sep Futures contract fall back 5.5 points lower to close at 1200.5 levels as compare to previous trading session to with a total of 3,600 lots traded in the market. FKLI were traded sideways despite quite significant movement for regional indices performance and Dow Jones electronic trading during the trading sessions.

Technically, FKLI seems still manage to hold above support levels at 1198 regions despite was traded sideways throughout entire trading sessions. Based on our technical knowledge, our opinion suggests FKLI would pull back slightly lower in the coming trading session where support seen at 1194.5 and 1181.5 regions. Traders were advice to holds long position around the support levels while be alert around resistance levels at 1209.5 and 1223 regions.

FCPO Commentary on 10/09/09

CPO 3rd month Nov futures contract fall RM31 as compare to previous trading sessions to close at RM2179 with a total of 10,963 lots traded in the market. CPO price was traded lower as crude oil and soybean oil were traded lower during electronic despite were closed firm during overnight trading sessions. As addition, traders were being cautious due to MPOB report that to be release tomorrow.

Technically, CPO price seems complete 178.6% and 61.8% Fibonacci projection levels at RM2217 region while 50% Fibonacci support levels at RM2170 was tested during trading sessions. Based on our technical view, our opinion suggests CPO price would rebound further higher in the coming trading session where resistance levels were seen at RM2285 and RM2320 regions. Traders were advice to hold long position in the coming trading session provided support levels at RM2170 and RM2144 must not be violated.

Gold Jumps to 18-Month High on Weaker Dollar, Inflation Outlook

Sept. 8 (Bloomberg) -- Gold rose to the highest price since March 2008, topping $1,000 an ounce, while silver climbed to a 13-month high as a weaker dollar and concern that inflation may accelerate boosted the appeal of precious metals.

Bullion surged as high as $1,009.70 in New York, within 3 percent of the record of $1,033.90 set in March 2008. The metal is headed for a ninth annual gain. Crude oil and all six industrial metals on the London Metal Exchange rallied as the U.S. Dollar Index fell as much as 1.2 percent to an 11-month low. Raw materials typically rise when the greenback falls. Equity indexes climbed from Tokyo to London and New York.

“The market thinks inflation is coming,” Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois, said by telephone. He has been trading gold for more than 30 years and believes gold won’t stay above $1,000 for long. “With interest rates so low, money is chasing money and the dollar is getting murdered.”

Governments have cut interest rates and boosted spending to fight the worst recession since World War II, spurring investors to buy bullion as a hedge against the prospect of accelerating inflation and currency debasement. Gold, silver and palladium holdings in exchange-traded funds have reached records.

Gold previously traded at more than $1,000 on Feb. 20, the first time the metal had surpassed that price since March 2008. Futures dropped as low as $865 on April 6. The metal advanced $3.10, or 0.3 percent, to $999.80 an ounce on the New York Mercantile Exchange’s Comex division. In London, bullion for immediate delivery surged as high as $1,007.70 and traded at $995.75 at 8:25 p.m. local time.

Selling May Ensue

“We are at levels similar to February and June this year, which triggered profit-taking, sending gold prices lower,” Anne-Laure Tremblay, a BNP Paribas SA analyst in London, said by e-mail. She cited “little in the way of inflationary pressures” as well as an appetite for riskier assets.

“This week I will be looking for consistent and steady trade above $1,000 before considering a long position in gold,” Ralph Preston, a Heritage West Futures Inc. analyst in San Diego, said by e-mail. “I’m looking for $1,200 gold before year’s end. I believe the Iranian deadline to negotiate with the West will have an impact on gold and oil moving into the final quarter of this year.”

Iran may offer to resume talks over the Persian Gulf country’s nuclear program, Agence France-Presse reported, citing comments by Foreign Minister Manouchehr Mottaki on the state-run ISNA news service. World powers have set an informal end-of- September deadline for Iran to respond on its atomic-power work.

$1,200 ‘Possible’

Gold may set a record within five sessions and “it’s possible” that it will touch $1,200 within weeks, Prospector’s Kaplan said. “And if a new record doesn’t come soon, it doesn’t come in the near future,” Kaplan said. “Markets think that the Fed isn’t going to withdraw stimulus money fast enough and that would cause inflation.”

Gold may be cementing its haven-investment status as governments flood the financial system with cash to haul the global economy out of a recession. The dollar index has dropped for three straight sessions, touching 77.047, the lowest since Sept. 29. The gauge has slipped 4.9 percent this year.

“We don’t see any immediate recovery in the dollar and gold is one of the better alternatives,” said Bernard Sin, the head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “From here, the next technical level is $1,040, and at the rate it’s going, it might not be difficult. There’s a lot of new money coming into gold.”

Decline by Year-End

Gold prices may reach a short-term peak of $1,050 and retreat to the “mid-$700s” by year-end, said Miguel Perez- Santalla, a Heraeus Precious Metals Management sales vice president in New York. “I am a bear” on gold, he said.

““Even though the U.S. dollar continues to be weak against the euro, gold is considered overall by the market to be overdone at the higher price level,” Perez-Santalla said. “I won’t put my money into gold, and I know many traders and their families that are rummaging their jewelry looking for scrap to sell to take advantage of these high prices.”

The metal’s advance boosted producers. Newcrest Mining Ltd., Australia’s largest gold-mining company, gained 3.7 percent to A$33.75 in Sydney. Zijin Mining Group Co., China’s biggest supplier, rose as much as 10 percent in Hong Kong.

“Gold can push much higher, especially if confidence in the dollar continues to recede,” Edward Meir, an MF Global Ltd. analyst in Darien, Connecticut, said today by e-mail. “In fact, adjusted for inflation going back to 1980, values should be around $2,500 an ounce.”

In London, lead, which has more than doubled this year to pace gains in metals, jumped 4.5 percent. Copper, which has doubled this year, rose 2.4 percent to a one-week high.

Other Precious Metals

Other precious metals have outperformed gold this year.

Silver futures for December delivery advanced 22.5 cents, or 1.4 percent, to $16.51 an ounce on the Comex, after touching $16.86, the highest for a most-active contract since Aug. 5, 2008. The metal has climbed 46 percent this year.

Palladium futures for December delivery rose $2.60, or 0.9 percent, to $298.60 an ounce and touched $301 earlier, a one-year high. The best-performing precious metal this year has gained 58 percent in 2009. Platinum futures for October delivery jumped $30.50, or 2.4 percent, to $1,289.60 an ounce in New York, increasing its gain for the year to 37 percent.

Investing in gold “is a hedge against policy makers losing control of fiscal and quantitative monetary policies,” said Greg Gibbs, a Royal Bank of Scotland Group Plc strategist in Sydney.

U.S. President Barack Obama has increased the nation’s marketable debt to an unprecedented $6.78 trillion as he borrows to spur the world’s largest economy. Goldman Sachs Group Inc. predicts that the U.S. will sell about $2.9 trillion of debt in the two years ending September 2010.

Oil Climbs

Crude-oil futures, used by some investors to forecast inflation, surged as much as 5.5 percent today and have soared 59 percent this year in New York. Consumer prices will rise 0.9 percent in advanced economies in 2010 compared with 0.1 percent gain this year, the International Monetary Fund said in July.

Gold’s eight-year advance, the longest in six decades, may attract more investors. Assets in some of the industry’s largest exchange-traded funds have set records in the past few months.

The SPDR Gold Trust, the biggest ETF backed by the metal, reached an all-time high of 1,134.03 metric tons on June 1. The fund, which held 1,077.63 tons as of Sept. 4, has overtaken Switzerland as the world’s sixth-largest gold holding. Bullion held in ETF Securities Ltd.’s exchange-traded products gained 6,640 ounces to a record 8 million ounces (248.8 tons) yesterday, its Web site showed.

The company’s silver holdings increased 0.9 percent to an all-time high of 20.516 million ounces, while palladium assets rose 1 percent to a record 456,953 ounces.

OPEC Committee Recommends Keeping Oil Output Quotas Unchanged

Sept. 9 (Bloomberg) -- The Organization of Petroleum Exporting Countries should maintain existing output quotas and improve compliance when the 12-member group meets today, the group’s production-monitoring committee recommended.

“We need more compliance” with existing production targets, Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah told reporters in Vienna. “I don’t foresee any cut,” he said, when asked at what price level the group might consider a further supply reduction.

Al-Sabah spoke to reporters yesterday after attending an hour-long evening meeting of OPEC’s Ministerial Monitoring Committee to review data on OPEC oil supply and demand at the group’s Vienna headquarters.

The MMC, comprising representatives from Iran, Nigeria and Kuwait, often recommends a course of action for the full meeting of OPEC ministers, which convenes at 9.30 p.m. in Vienna. OPEC Secretary General Abdalla El-Badri and Iran’s incoming Oil Minister Masoud Mir-Kazemi both left the MMC meeting without commenting.

OPEC is meeting for a third time this year to discuss quotas. It left them unchanged at the two previous meetings in March and May. The MMC also recommended no change in quotas when it met before OPEC’s May meeting.

The group agreed late last year to cut production targets by 4.2 million barrels a day after prices crashed more than $100 a barrel from a record of $147.27 in July 2008.

Compliance Percentage

The 11 OPEC members bound by quotas are currently complying with about 68 percent of their promised cutbacks, Al-Sabah said, adding that “75 percent would be fine.”

Those members, all except Iraq, pumped 26.055 million barrels a day in August, according to estimates in a Bloomberg survey, which indicates quota compliance of about 71 percent. Only Saudi Arabia, Kuwait and Qatar pumped less than their target. Iran, Angola and Venezuela are the biggest quota busters.

Oil rallied from a low of $32.70 in January to peak this year of $75 a barrel on Aug. 25. Crude for October delivery was trading at $71.16 on the New York Mercantile Exchange at 8:24 a.m. in Singapore. Al-Sabah said current prices are “O.K.” and said a supply cutback is unlikely in the near future even though the market is “oversupplied.”

OPEC will probably leave production quotas unchanged for a third time at tomorrow’s meeting, according to all 26 analysts surveyed by Bloomberg News.

Saudi Arabia Oil Minister Ali al-Naimi, who represents OPEC’s biggest and most influential producer, said this morning the global crude market is in “good shape.”

“The price is good for everybody, consumers, producers,” Al-Naimi said as he arrived in Vienna for today’s meeting. “The market is very well supplied.”

Ministers will gather at the group’s headquarters after dark because the summit falls in the Muslim holy month of Ramadan.

Oil Trades Near $71 as Dollar Declines, OPEC Ministers Gather

Sept. 9 (Bloomberg) -- Crude oil traded little changed near $71 a barrel after rising yesterday as a slump in the dollar spurred demand for commodities, and as OPEC ministers gathered in Vienna to set output levels.

Oil gained as much as 5.5 percent yesterday as the U.S. currency dropped to the lowest level this year against the euro and on speculation inflation will accelerate. The oil market is in “good shape,” Saudi Arabian Oil Minister Ali al-Naimi said, signaling the group is unlikely to change production.

“The dollar is continuing to put immense pressure on oil to trade higher thanks to its downward price spiral,” said Mike Sander, an investment adviser at Sander Capital in Seattle. “Equities confidence and stabilization is helping to put a floor under the price of oil.”

Crude oil for October delivery gained 15 cents, or 0.2 percent, to $71.25 on the New York Mercantile Exchange at 9:35 a.m. Sydney time. Yesterday, the contract rose $3.08, or 4.5 percent, to $71.10, the biggest gain since Aug. 19. Prices are up 60 percent this year.

The Standard & Poor’s 500 Index rose for a third day, gaining 0.9 percent in New York and the Dow Jones Industrial Average climbed 0.6 percent. The euro traded at $1.4503 at 7:56 a.m. in Tokyo from $1.4478 in New York yesterday, when it reached $1.4535, the highest level since Dec. 18.

“If the dollar continues to fall, oil is only going to go higher,” Sander said.

OPEC Unchanged

Members of the Organization of Petroleum Exporting Countries have said the group should keep its production target unchanged at 24.845 million barrels a day when it meets today. All of the 26 analysts surveyed by Bloomberg News predicted the organization will keep quotas steady.

The OPEC meeting “should be a non-event, with most expecting a no-change supply outcome,” said Mark Pervan, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. “A surprise cut in supply would be met positively, although a still lax compliance record, around 75 percent currently, suggests the upside would be short-lived.”

The market is “very well supplied,” Saudi Arabia’s Al- Naimi said before the meeting. “The price is good for everybody: consumers, producers.”

An Energy Department report tomorrow is likely to show U.S. crude and gasoline inventories declined last week, a Bloomberg News survey showed.

Brent crude oil for October settlement rose $2.89, or 4.3 percent, to close at $69.42 a barrel on the London-based ICE Futures Europe exchange yesterday. It was the first increase in seven days.

Euro Rises Toward 9-Month High Versus Dollar on Recovery Signs

Sept. 9 (Bloomberg) -- The euro rose toward a nine-month high against the dollar before a government report forecast to show French industrial production increased for a third month in July, boosting demand for higher-yielding assets.

The dollar dropped against the Australian dollar for a sixth day on expectations Federal Reserve officials will today indicate they plan to refrain from raising interest rates. Dallas Fed President Richard Fisher said last week the U.S. may see “a prolonged period of sluggish economic performance.” The euro advanced against 15 of its 16 major counterparts before a report this week expected to show Japanese consumer confidence rose for an eighth month in August.

“Risk appetite is coming back on the table, supporting the euro,” said Susumu Kato, chief economist in Tokyo at Calyon Securities, the investment banking unit of Credit Agricole SA. “The euro is also benefiting from uncertainty about the U.S. economy. The euro-zone is likely to see a hike in interest rates before the U.S. does.”

The euro traded at $1.4497 at 9:29 a.m. in Tokyo from $1.4478 in New York yesterday, when it reached $1.4535, the highest level since Dec. 18. The dollar was at 92.35 yen from 92.32 yen. The euro climbed to 133.87 yen from 133.67 yen, after earlier reaching 133.98 yen, the highest level since Sept. 1.

The greenback declined to 86.36 cents per Australian dollar from 86.16 yesterday, when it touched 86.58, the lowest since Aug. 29, 2008.

Benchmark interest rates are as low as zero in the U.S. and 3 percent in Australia, making the South Pacific nation’s assets attractive to investors seeking higher returns. The risk in such trades is that currency market moves will erase profits.

‘Inflation Debate’

The euro advanced as economists surveyed by Bloomberg News said the Paris-based statistics office Insee may report factory output in France gained 0.4 percent in July after rising 0.3 percent in June. The data is due tomorrow.

“Global growth indicators remain supportive for risk takers,” analysts led by Hans-Guenter Redeker, London-based global head of currency strategy at BNP Paribas SA, wrote in a research note yesterday. “The dollar will remain under selling pressure.”

The dollar weakened before speeches by Chicago Fed President Charles Evans and Dallas Fed President Richard Fisher today. Evans will speak on “The Great Inflation Debate” in New York and Fisher will speak on “Today’s Economy: New Challenges for Business” in Dallas.

Atlanta Fed President Dennis Lockhart will speak in Jacksonville, Florida, and Fed Vice Chairman Donald Kohn will speak in Washington tomorrow.

The euro advanced against the yen for a fifth day as economists surveyed by Bloomberg News forecast consumer confidence in Japan climbed to 40.2 in August from 39.7 in July, boosting demand for higher-yielding assets. The Cabinet Office is set to release the data on Sept. 11 in Tokyo.

India soyoil up tracking firm Malaysian palm, spot

MUMBAI, Sept 8 (Reuters) - Indian soyoil futures ended sharply up on Tuesday tracking a firm Malaysian palm, and on short-covering triggered by spot buying in edible oils after falls early this month, analysts said.

Soybean prices also ended up, but rains in the growing regions weighed, they added.

"The spot market saw good buying after a long time...with festivals nearing, we can expect buoyant trend to continue this week," said a trader in Indore, a hub for edible oil trade.

Soyoil prices in the spot market in Indore rose 2.48 percent to 41,300 rupees per tonne following a spike in demand ahead of festivals later this month, traders said.

However, soybean prices fell 1.05 percent to 18,800 rupees per tonne after recent rains boosted crop prospects.

The benchmark November palm oil futures KPOc3 on Bursa Malaysia Derivatives Exchange ended at 2,210 ringgit a tonne, up 3.76 percent.

Palm oil and soybean are related commodities and their prices often move in tandem.

FCPO Commentary on 09/09/09

CPO 3rd month Nov futures contract surge RM76 as compare to previous trading sessions to close at RM2130 with a total of 9,668 lots traded in the market. CPO price was traded higher as soybean oil and crude oil electronic trading were traded higher after a day rest from trading.

Technically, CPO price was manage to holding above support levels at RM2128 and RM2100 regions in the previous trading session while manage to surge higher during trading session. Based on our technical view, our opinion suggests CPO might encounter some selling pressure around resistance levels at RM2220 and RM2235 regions. However, traders were advice to hold long position around support levels at RM2167 and RM2143 regions.

FKLI Commentary on 09/09/09

FKLI Sep Futures contract surge 13.5 points higher to close at 1206 levels as compare to previous trading session to with a total of 5,800 lots traded in the market. FKLI surge strong after been boosted by regional indices strong closing while Dow Jones electronic trading was traded high during trading sessions.

Technically, FKLI seems penetrate our resistance levels at 1198 regions convincingly while manage to close at 1206. Based on our technical view, our opinion suggests FKLI currently riding on a bull rally provided support levels at 1198 must not be violated during trading sessions. Traders were advice to hold long position in the coming trading session while be cautious around next resistance levels at 1217 and 1222 regions.

Gold Futures Advance to $1,000 an Ounce Amid Dollar Weakness

Sept. 8 (Bloomberg) -- Gold futures rose to $1,000 an ounce for the first time in more than six months as a weaker dollar boosted the metal’s appeal as an alternative investment.

The contract for December delivery reached $1,000 on the Comex division of the New York Mercantile Exchange, extending this year’s advance to 13 percent. Gold for immediate delivery touched $998.25 an ounce. Gold has rallied every year since 2000.

Governments cut interest rates and boosted spending to fight the worst recession since World War II, spurring investors to buy bullion as a hedge against potential inflation and debasement of currencies. The Dollar Index has lost 4.1 percent this year. Gold typically moves inversely to the U.S. currency.

“There’s not many good options for investors to hedge against a declining dollar and rising inflation,” Hwang Il Doo, head of trading with KEB Futures Co. in Seoul, said today. “Gold will rise to $1,100 an ounce by the end of the year, once physical demand from China and India adds fuel to the rally.”

Gold last traded at more than $1,000 on Feb. 20, the first time the metal had breached that price since March 2008. The futures then retreated as low as $865 on April 6. The December contract added 0.2 percent to $998.90 an ounce in New York as of 8:48 a.m. in Singapore. Spot gold traded at $997.20 an ounce.

Gold is cementing its status as a haven investment as governments seek to flood the financial system with cash in an effort to haul the global economy out of a recession. Gold futures record is $1,033.90 an ounce, reached on March 17, 2008.

‘Losing Control’

“The reasons to own gold as an investment make sense,” Sydney-based Greg Gibbs, a Royal Bank of Scotland Group Plc strategist, said in advance of the metal’s gain to $1,000 today. “It is a hedge against policy makers losing control of fiscal and quantitative monetary policies.”

U.S. President Barack Obama has increased U.S. marketable debt to an unprecedented $6.78 trillion as he borrows to spur the world’s largest economy. Goldman Sachs Group Inc. predicts that the U.S. will sell about $2.9 trillion of debt in the two years ending September 2010.

“Money has been printed massively,” said investor Jim Slater, who was deputy chairman of Galahad Gold Plc before it liquidated in 2008. “Inflation will follow fairly soon” and there may be “a hint of hyperinflation. Even a hint will be very good news for gold.”

The Dollar Index, a six-currency gauge of the dollar’s value, declined for a third day today, trading near the lowest since Sept. 2008.

FKLI Commentary on 08/09/09

FKLI Aug Futures contract surge 10.5 points higher to close at 1192.5 levels as compare to previous trading session to with a total of 3,065 lots traded in the market. FKLI surge strong despite regional equity indices and Dow Jones futures electronic were not much in a bullish sentiment during the trading sessions.

Technically, FKLI seems manage to penetrate our resistance levels at 1192 regions while closing at 1192.5 regions. Based on our technical view, our opinion suggests FKLI would encounter some amount of selling pressure around resistance levels at 1198 and 1208 regions. Traders were advice to take profit around the resistance levels while be assured that support levels at 1184.5 and 1174.5 must not be violated in any circumstances.

FCPO Commentary on 08/09/09

CPO 3rd month Nov futures contract fall another RM67 as compare to previous trading sessions to close at RM2130 with a total of 9,668 lots traded in the market. CPO price was traded lower despite soybean oil electronic trading was closed for trading due to Labor Day.

Technically, CPO price manage to found new support at RM2128 regions; 323.6% and 78.6% Fibonacci projection figure to complete wave 3 formations. Based on our technical view, our opinion suggests CPO price would rebound in the coming trading session provided support levels at RM2120 and RM2087 were not violated during trading session as there were 3 gaps appeared in the daily price chart. Traders were advice to hold long position in the coming trading sessions while be cautious around resistance levels at RM2235 and RM2256 regions.

FKLI Commentary on 07/09/09

FKLI Aug Futures contract rose 5 points higher to close at 1182 levels as compare to previous trading session to with a total of 3,769 lots traded in the market. FKLI manage to trade higher during trading session as regional indices especially Hang Seng indices surge strongly in the 2nd trading sessions.

Technically, FKLI manage to penetrate previous high point at 1181.5 with closing at 1182 levels; above 78.6% Fibonacci rebound levels at 1181 regions. Based on our technical view, our opinions suggests FKLI would likely to trade higher in the coming trading session provided support levels at 1180 and 1173 were not violated. Traders were advice to hold long position with condition support levels must not be violated while be cautious around resistance levels at 1189.5 and 1192.

FCPO Commentary on 07/09/09

CPO 3rd month Nov futures contract fall RM21 as compare to previous trading sessions to close at RM2197 with a total of 7,349 lots traded in the market. CPO price was traded lower few hours before market closed as crude oil and soybean oil electronic trading were traded lower during trading sessions.

Technically, CPO price manage to rebound 61.8% Fibonacci retrace levels at RM2235 regions before manage to break down from the uptrend channel support levels at RM2225 regions. Based on our technical view, our opinion suggests CPO price would trade lower in the coming trading session provided resistance levels at RM2235 and RM2256 must not be violated during trading sessions. Traders were advice to hold short position in the coming trading session while be cautious around support levels at RM2172 and RM2086.

Oil Is Steady Amid Gain in U.S. Equities, Above Average Supply

Sept. 4 (Bloomberg) -- Crude oil was little changed, falling three cents in three days, amid a gain in U.S. equities and speculation that stockpiles are ample to meet demand in the world’s biggest energy-consuming country.

Oil rose from the day’s lows as the Standard & Poor’s 500 Index had the biggest gain in two weeks. A U.S. Energy Department report on Sept. 2 showed that crude and fuel supplies last week were above the five-year average. Prices have ended the trading session little changed for three days as trading volume fell before this weekend’s U.S. Labor Day holiday.

“Most traders are looking forward to a long weekend at the beach, and not thinking about the tankers that are waiting offshore,” said Michael Lynch, president of Strategic Energy & Economic Research, in Winchester, Massachusetts. “There is a lot of product on hand as we go into maintenance season. Demand for crude oil is going to drop in coming weeks.”

Crude oil for October delivery rose 6 cents to settle at $68.02 a barrel at 2:53 p.m. on the New York Mercantile Exchange. Oil declined 6.5 percent this week, the biggest drop since the week ended July 10, as early gains during each trading session have been slashed before the close. Futures are up 53 percent this year.

Brent crude oil for October settlement on the London-based ICE Futures Europe exchange decreased 30 cents, or 0.4 percent, to end the session at $66.82 a barrel. It was the lowest closing price since July 29. The contract fell 8.2 percent this week, the biggest weekly decline this year.

The S&P 500 Index rose 1.3 percent to 1,016.27 at 4:01 p.m. in New York and the Dow Jones Industrial Average increased 1 percent to 9,440.74.

Labor Day Holiday

There will be no floor trading in New York on Sept. 7 because of the Labor Day holiday.

U.S. crude-oil supplies fell 372,000 barrels to 343.4 million last week, the Energy Department reported Sept. 2. The decline left stockpiles 11 percent higher than the five-year average for the period, according to the department.

Gasoline inventories declined 2.97 million barrels to 205.1 million, the sixth straight drop, the report showed. Supplies of the motor fuel were 2.3 percent higher than the five-year average. Stockpiles of distillate fuel, a category that includes heating oil and diesel, rose 1.18 million barrels to 163.6 million, the highest level since October 1983.

Gasoline consumption ebbs after the end of the so-called driving season, which lasts from the Memorial Day weekend in late May to the Labor Day holiday. U.S. refineries often idle units for maintenance in September and October as gasoline demand falls and before heating-oil use rises.

Technical Weakness

“From a technical viewpoint, we are looking at weakness,” said Phil Flynn, vice president of research at PFGBest, a Chicago-based brokerage. “Once the holiday is over there may be further downward pressure.”

Oil is on a “slippery slope” after failing to break through resistance and is set to test $60.43 a barrel, according to technical analysis by Auerbach Grayson, a brokerage in New York. The failure of October futures to breach $75.27, the June 11 high, has made crude vulnerable to a “significant decline,” said Richard Ross, a technical analyst at Auerbach Grayson.

“We are right on a precipice here and are at a very important inflection point,” Ross said in a telephone interview. Settling below $68 a barrel yesterday “opens the door to testing $65 and $60.43, which was the low on July 13.”

The Organization of Petroleum Exporting Countries is scheduled to meet in Vienna on Sept. 9 to discuss production targets. Members have implemented about 71 percent of the 4.2 million barrels a day of supply cuts agreed to last year, according to data compiled by Bloomberg News. The group has called for greater compliance with existing quotas at meetings this year.

OPEC Aims

“What OPEC wants to do is cut inventories,” T. Boone Pickens, the founder and chairman of Dallas-based BP Capital LLC, said today in an interview on Bloomberg Television. “You will start seeing inventories fall pretty quickly.”

Jose Maria de Botelho Vasconcelos, the organization’s president and Angolan oil minister, said on Sept. 2 that the 12- member group would hold its current course to avoid higher oil prices derailing the global economic recovery.

Futures may fall next week, according to a weekly Bloomberg News survey. Seventeen of 34 analysts surveyed, or 50 percent, said futures will drop through Sept. 11. Eight respondents, or 24 percent, forecast that the market will rise and nine said prices will be little changed.

Oil volume in electronic trading on the Nymex was 368,728 contracts as of 3:28 p.m. in New York. Volume totaled 431,086 contracts yesterday, 20 percent lower than the average over the past three months. Open interest was 1.17 million contracts. The exchange has a one-business-day delay in reporting open interest and full volume data.

Dollar, Yen Fall After Payrolls on Bets Demand for Risk to Rise

Sept. 4 (Bloomberg) -- The dollar and yen dropped against most of their major counterparts on bets investors optimistic the global economy will quickly recover bought higher-yielding assets after a report showed U.S. payroll losses slowed.

Canada’s currency was the best performer versus the yen among the most-traded currencies tracked by Bloomberg as the government reported the first gain in jobs since April. U.S. Treasury Secretary Timothy Geithner reaffirmed this week his commitment to supporting the global recovery before meeting with Group of 20 officials in London this weekend.

“The policy backdrop is exceedingly supportive,” said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York. “All the positive comments from Geithner and the G-20 authorities over the weekend will set us up for a nice bounce in risk.”

Japan’s currency slid 0.8 percent to 133.04 versus the euro at 4:08 p.m. in New York, from 132.03 yesterday. The dollar weakened 0.4 percent to $1.4302 per euro, from $1.4252, and rose 0.4 percent to 93 yen.

The yen declined 1.9 percent to 63.94 versus the New Zealand dollar and weakened 1.7 percent to 6.96 against the peso on speculation investors in Japan will sell their currency to buy higher-yielding assets elsewhere. The target lending rate of 0.1 percent in Japan compares with 2.5 percent in New Zealand and 4.5 percent in Mexico.

The euro rose briefly against the dollar after the Labor Department reported at 8:30 a.m. in Washington that job cuts slowed to 216,000 in August. The currency later approached the lowest level this week about 30 minutes after the report and then resumed gaining from about 11:40 a.m. to its intraday high of $1.4327.

Recovery ‘Uncertainty’

“There’s too much uncertainty about how this will play out,” said Shaun Osborne, chief currency strategist at TD Securities Inc. in Toronto. “From a recession point of view, we still have a long way to go. Just look at the job losses. It’s not like any recovery we saw since 1980.”

The unemployment rate climbed to a 26-year high of 9.7 percent, and the Labor Department revised its estimate for job cuts in July to 276,000, from 247,000 previously.

The Standard & Poor’s 500 Index advanced 1.3 percent, trimming this week’s drop, as job losses last month fell short of the 230,000 decline predicted in a Bloomberg News survey of 79 economists.

The dollar fell against the South African rand for a third week in its longest stretch of declines since May, decreasing 2.1 percent to 7.5895. The euro slumped versus Japan’s currency, depreciating 0.6 percent.

Canadian Jobs

Canada’s dollar strengthened as much as 1.8 percent to C$1.0824 per U.S. dollar in the biggest intraday rally since July 15. Statistics Canada reported employment rose last month by 27,100, compared with economists’ median forecast of a drop of 15,000. The unemployment rate increased to 8.7 percent as the labor force grew.

The euro erased its gain versus the dollar yesterday as European Central Bank President Jean-Claude Trichet said the economic recovery in his region will be “rather uneven” after holding the target lending rate at a record low of 1 percent.

“Trichet sounded extremely dovish,” a team of Commerzbank AG analysts including Ulrich Leuchtmann in Frankfurt said in a report today. “It is hardly surprising that the dollar was able to benefit from it.”

The Federal Reserve signaled in minutes of its August meeting published on Sept. 2 that it’s trying to prepare investors for an end to some of its asset purchases as the U.S. economy shows signs it’s beginning to recover from its worst slump since the Great Depression.

G-20 Meeting

Geithner told reporters on the same day in Washington that it’s still “too early” for G-20 nations to implement exit strategies. Finance ministers and central bankers meet today and tomorrow in London.

The Dollar Index rose 1.2 percent to 78.975 on Aug. 7 as 10-year Treasury yields climbed after a report showed July payrolls dropped less than economists forecast. The gauge, which the ICE uses to track the currencies of six major U.S. trading partners, slid 0.4 percent to 78.144 today on reduced demand for the safety of the greenback.