Financial Market Comments from Philip Gillett, Sales Trader, IG Index.

The FTSE 100 got off to a positive start this morning, boosted by skyrocketing gold prices.

Currently, the UK’s leading index is trading at the 5338 level (11am London time) as miner’s reap the benefits of the rising price of gold.

The yellow metal has hit an all-time high of $1167.35 an ounce as investors sought security from the weakening Dollar.

Randgold and Fresnillo are the biggest benefactors, up 4.55% and 4.68% respectively, while Rio Tinto, Xstrata and Lonmin are not far behind.

Among the food producers, ongoing speculation about potential bidders for Cadbury drove a rise of 1.4% in their share price, with Nestlé, Kraft and Hershey’s all reported to be weighing up takeover offers.

With no end in sight for the Dollar’s slump, gold’s success looks set to continue pushing the FTSE towards the psychological 5500 barrier.

However, it will be interesting to see how the market responds to the announcement of Northumbrian Water’s interim results today, which are expected to be less-than-encouraging.

Falling utility company share prices may be widespread as a result – particularly as investors are already nervous about Ofwat’s release of their final report into pricing structures later this week – but it is difficult to predict whether this will have any serious impact on the FTSE when set against the exceptional performance of the mining sector.

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Good Luck!

DB

The above comments do not constitute investment advice Clean Financial accepts no responsibility for any use that may be made of them.

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