GOLD AND OIL RISE ON MIDEAST UNREAST AND DEBT FEARS

If you think we were out of the woods you would be wrong.

First gold is rising

Gold prices rose to settle at a record high above $1,452 ounce Tuesday, as new peaks in crude oil and grains fueled inflation fears and a downgrade of Portugal's credit rating fed safe-haven demand.

Bullion prices broke out after a struggle to sustain new highs in the last month, and silver soared to a 31-year peak after Federal Reserve Chairman Ben Bernanke suggested he was committed to complete a $600 billion stimulus program as scheduled in June.

"What it shows is that big money continues to believe gold will go higher...because Bernanke wants to grow at any cost," said Axel Merk, portfolio manager of the $600 million Merk Mutual Funds.

"The other reason for gold to go up is that there was a downgrade in Portugal, so people realize there are still some issues."

Also the price of gas continues to rise.

With crude oil’s price continuing to climb this spring, the gasoline produced from it has stayed on an upward price trend locally as well.

Between Sunday and Monday, stations around Petoskey typically adjusted their selling price for regular unleaded upward by 20 cents, to $3.89.9 gallon.

A search of fuel price monitoring website gasbuddy.com revealed similar pricing at stations in Charlevoix, East Jordan and Gaylord.

Statewide, AAA Michigan’s price survey showed regular unleaded’s price averaging $3.75 per gallon on Monday.

“Prices ... are up almost 15 cents from a week ago, and 91 cents more from this day last year,” AAA spokeswoman Nancy Cain said.

The key driver in the price increase continues to be the rising cost of crude oil, Cain said. With ongoing unrest in parts of the oil-producing Middle East, fears about supply losses have influenced crude’s per-barrel price upward by more than $20 in the past couple of months, to about $108 early this week.

A seasonal factor — oil refineries’ changeover to produce different gasoline blends for warmer-weather use — likely is at play in the fuel price increase as well, Cain said.

When I was in Pittsburgh this past weekend I saw gas around $3.60-80 USD and we were only in April. When I came back to SoCal last night I noticed that regular unleaded was over $4 USD everywhere. We have yet to hit the big summer driving season (where most of the big anime conventions take place) where prices normally go up. We could easily see 5 USD per gallon gas in SoCal before June if prices keep climbing the way the have been.

It will be interesting to see how that impacts the anime conventions.