Worries about a deeper global economic slowdown had already shattered global equities earlier in the day and also hit the dollar while commodity prices soared, adding inflation fears. Gold was steady at $925 an ounce, near its all – time high of $936.50. Supply problems have also fuelled other commodities, such as platinum. It hit a fresh record high $2,025 on Tuesday due to lingering supply concerns in South Africa, which produces some 80 percent of the world’s metal. Other precious metals were off highs, with gold ignoring news the Group of Seven rich nations on Saturday approved the sale of gold by the International Monetary Fund from April as part of a reform of its budget. Gold extended losses on Wednesday after a rise in stock markets and news of reduced purchases by India. In the physical sector, purchases from jewellers and investors started to pick up as prices moved away from historic highs, but business remained slow in main consumer India despite the wedding season. India’s gold imports in January slumped to just five tonnes from 62 tonnes in the same month a year ago. But investment buying, record high crude oil, volatile stock markets, a struggling US dollar and the prospect of more interest rate cuts in the United States would offer support for gold.

Finance leaders from the Group of Seven major economies said over the weekend that the bursting US housing market had hurt the world economy. The euro was initially up 0.3 percent after comments from European Central Bank policymakers which dampened speculation about a rate cut. Governing Council member Axel Weber told a German newspaper that the ECB had not relaxed its view on inflation risks. Despite the record high inflation in January, the ECB moved to a neutral policy stance from tightening last week due to growing signs that the economy was slowing. The dollar dipped against the euro and yen on Thursday after Federal Reserve Chairman Ben Bernanke said the US economic outlook had worsened and that the central bank would act as needed to support growth. The euro edged up to $1.4608 after Bernanke’s prepared remarks before the Senate Banking Committee. The comments reinforced the impression the Fed will cut its benchmark rate by 50 basis points in March meeting. In theory, a rate cut will boost gold’s appeal as an alternative investment. Stocks, bonds and the US dollar all weakened on Thursday after Bernanke’s speech of a US economy facing risks of both slow growth and inflation. In the meantime, former Federal Reserve Chairman Alan Greenspan on Thursday said the US economy is clearly on the edge of a recession and is being burdened by high oil prices.

Oil jumped to a one – month high above $95 a barrel after Venezuela, the fourth biggest supplier of crude to the United States, cut off oil shipments to the States in a dispute with Exxon over payments for nationalized properties. Additional support came from cold weather in the US Northeast and a handful of refinery problems, which were expected to tighten up supplies of heating oil. Recent incidents in Venezuela and Nigeria and reports of reduced production output in Russia, have helped push up crude oil prices, even as high prices and a weakening US economy reduce demand. In Nigeria, a unit of Royal Dutch Shell said last week 130,000 barrels per day of crude output was halted because of leaks on the Nembe Creek pipeline in the Niger Delta. While the legal battle between Venezuela and Exxon Mobil escalates, analysts said the move to halt oil shipments would have little impact on US supplies or the US oil company. Major oil producers in the Middle East have assured the United States they could compensate for a supply disruption if Venezuela slows exports in its dispute with Exxon. Supply worries also eased as Mexico re – opened all three of its main oil exporting ports on Thursday, a day after they were closed because of bad weather in the Gulf of Mexico.