Gold climbed to a record high today as investors fled to safe-haven assets sparked by fears that Europe's debt crisis could spread to France, while oil reversed early losses.
The euro's financial woes returned to focus on rumours France may be in trouble, stealing the spotlight from the US Federal Reserve's promise to keep interest rates low for at least another two years.
Although they were denied, rumours of an impending downgrade of France's credit rating and the financial health of a key bank in the country rattled markets, sending US stocks tumbling more than 4 per cent yesterday.
Spot gold hit an all-time high of $1,813.79 an ounce, while US gold also hit a record of $1,817.60.
The relative strength index for spot gold briefly rose above 85, the highest since October 2010, suggesting a heavily overbought market.
Brent crude oil briefly fell more than a dollar to an intraday low of $105 a barrel on demand worries, but has since recovered and was trading up 33 cents at $107.01 a barrel this morning.
Brent has fallen around 4 per cent since ratings agency Standard & Poor's cut the top-tier credit rating of the United States last Friday.
The worsening economic outlook for developed countries overshadowed a drawdown of 5.23 million barrels in US crude stocks, which confounded analysts' expectations for a 1.5 million barrel increase.
Reuters