Gold soared to a record on Monday as a shaky global economic outlook spurred safe-haven buying, while Brent crude slid more than $3 on hopes Libya will resume oil production soon as a six-month conflict in the country appeared close to an end.
Fears the U.S. economy could slide into a recession after a recent spate of poor data and Europe's debt crisis fueled gold's surge to a 10th record high this month and analysts predict bullion could hit $2,000 soon, given the strong momentum.
We are not expecting anything supporting the U.S. economy or the macro data for at least a couple of months. Europe we regard even weaker, said Tom Price, global commodity analyst at UBS.
We are thinking $1,900-$2,000 over the very short period of time is a likely target.
Spot gold jumped more than 1 percent to an all-time high of $1,882.20 an ounce by 2:18 a.m. EDT. So far this month, bullion is up more than 15 percent, its best showing since September 1999.
All eyes are on Federal Reserve Chairman Ben Bernanke's speech on Friday at an annual central bank conference in Jackson Hole, Wyoming, where investors would be looking for hints of stimulus measures after Bernanke acknowledges the slow pace of growth of the world's top economy.
The U.S. economy is growing so slowly that it will take years to bring the unemployment rate down from above 9 percent to the more normal 5- percent, Cleveland Federal Reserve Bank President Sandra Pianalto said on Friday.
We're not forecasting another recession in the U.S. but there's no doubt that the risks to the downside have strengthened over the past few months, said Ben Westmore, commodity economist at National Australia Bank.
A lot of the participants in the gold market seem to think that the U.S. weakness is likely here to stay.
LIBYA WEIGHS ON BRENT
Brent oil fell $3.08 to as low as $105.54 a barrel on the potential for resumption of exports from Libya.
Libyan rebels entered the capital Tripoli with little sign of resistance from Muammar Gaddafi's forces and crowds took to the streets to celebrate what they saw as the rapidly approaching end of his four decades of absolute power.
OPEC member Libya pumped around 1.6 million barrels per day, nearly 2 percent of global supply, before the war cut output. Most of Libya's high-quality crude flowed to European refiners, and tightening supply after Libyan exports stopped drove Brent to a two-year high of $127.02 in April.
Libyan rebels could resume oil output at two large fields in the east of the country within three weeks.
U.S. crude slipped 72 cents to $81.54 a barrel.
Copper gave up early gains to edge 0.1 percent lower to $8,815 a tonne, in tight-range trading as investors weighed bets on firm Chinese demand and supply risks.
The labor union at the world's No. 3 copper mine, Chile's Collahuasi, last week threatened to stage a one-day stoppage on September 2 if the mine's operator does not hire back workers fired after a previous disruption.
Supply issues supported grain prices, with Chicago wheat rising 1.2 percent to $7.70 a bushel, near the day's high of $7.70-1/4, its loftiest since June 16. Corn gained 0.8 percent to $7.31.
Supplies of U.S. high-protein spring wheat have been tight for months, and the 2011 harvest that traders hoped would replenish grain bins is running a few weeks later than normal after widespread planting delays.
(Additional reporting by Rujun Shen; Editing by Himani Sarkar)