Gold fell on Friday to track weaker oil, while platinum jumped to its highest in more than a week as speculative buying accelerated after the white metal regained $2,000 an ounce. Gold jumped to a one – week high of $954.50 on Thursday before rebounding dollar erased some of the gains and dropped to $944.00 an ounce on Friday as the US dollar’s decline against the euro halted, reducing the metal’s appeal as an inflation hedge. Gold has rallied a lot since its correction and has shown some strong correlation with the euro. Concerns for the US economy and the trend in the euro will still dictate where gold is going next.

The dollar fell back towards record lows against the euro on Friday as rumours of more troubles at US investment banks kept investors on edge about the ongoing fallout from the credit crisis. The dollar resumed its losing path after rumours on Thursday that Lehman Brothers could suffer a fate similar to the near collapse of Bear Stearns. Lehman called the rumours “totally unfounded”. News that investment bank Morgan Stanley could see its $11 billion – plus credit line backing its commercial paper programme shrink under $5 billion added to caution. The euro edged up to $1.5789 from around $1.5770 in late US trade on Thursday, turning back towards its record high of $1.5905 after making a pause from sharp gains made earlier this week. A series of weak housing and capital spending data has convinced more investors the US economy is already in a recession and supported expectations for a big Federal Reserve rate cut from the current 2.25 percent. By contrast, European Central Bank President Jean – Claude Trichet’s remarks this week that euro zone rates were at the right level eased expectations for a near – term rate cut from 4 percent.

Oil fell towards $106 a barrel on Friday as traders wary over the US economic outlook took profits from a three – day rally and were cheered by news that Iraq’s oil pipeline system was back at near normal levels. On Thursday, saboteurs blew up a pipeline in southern Iraq, cutting exports by 300,000 barrels per day, helping lift crude to a $1.68 gain. But on Friday, a senior Iraqi oil official said Iraq’s southern oil pipeline system was back at near normal levels to its Basra export terminal after the two main pipelines were left undamaged during Thursday’s attack. Despite Friday’s declines, prices are still up 5 percent on the week, near their mid – March record high of $111.80, amid a broad fund – led rally in commodities markets aided by a weak US dollar and news of an unexpectedly deep decline in weekly US fuel stocks. Analysts said the attack (the first disruption to shipments from Iraq's south since 2004) could prompt traders to attach a bigger “fear premium” to prices, as it raised the risk to previously stable supplies.