Commodities Rebound as Gold Reaches Record; Silver, Sugar Gain

The Standard & Poor?€™s GSCI Index of 24 commodities rose as much as 1.5 percent, after plunging 3.3 percent yesterday. Silver futures were up 2.9 percent at 10:46 a.m. in New York, sugar rose 3.2 percent, and gasoline gained 1.7 percent. Copper advanced for the third time this week, and gold rallied as much as 3.3 percent to $1,881.40 an ounce, the highest ever.

Commodities are up 1.6 percent this year while the MSCI All-Country World Index of equities tumbled 12 percent on concern the sovereign-debt crisis is threatening global growth and demand for raw materials. Consumption of oil shows no sign of a recession, Goldman Sachs Group Inc. said.

?€œThere is a lot of risk off in global financial markets, and in that respect, commodities are in fact very resilient,?€ said Arne Lohmann Rasmussen, the head of rates, foreign exchange and commodities strategy at Danske Bank A/S in Copenhagen. ?€œCopper will still be a tight market even if there is lower growth in the U.S. because of strong demand in Asia and still weak supply.?€

Citigroup Inc. cut its forecasts for U.S. growth after data yesterday showed jobless claims rose and Philadelphia-area manufacturing shrank by the most since 2009. The U.S. is the largest oil consumer and second to China in use of copper.

?€˜Critical Mass?€™

?€œThe critical mass of bad news has clearly now been reached,?€ Commerzbank AG said in a report today. ?€œThe situation should only change on a lasting basis once the news improves or governments and central banks do something to restore more confidence on financial markets.?€

Lars Frisell, the chief economist at Sweden?€™s financial regulator, said it won?€™t take much for interbank lending to freeze. The Wall Street Journal said regulators were scrutinizing the U.S. operations of Europe?€™s largest lenders.

U.S. initial jobless claims climbed by 9,000 to 408,000 in the week ended Aug. 13, topping the median estimate of economists surveyed by Bloomberg for a rise to 400,000. The Fed Bank of Philadelphia?€™s general economic index unexpectedly plunged to minus 30.7, the lowest level since March 2009.

Brent Stuck

?€œSpeculation about the debt burden in European countries may trigger a new round of risk aversion,?€ said Thina Saltvedt, a Nordea Bank AB analyst in Oslo, who predicts Brent crude oil will be unable to rebound beyond $118 a barrel this quarter. The price was up 1.4 percent at $108.52 today.

If oil resumes its slide, the Organization of Petroleum Exporting Countries, including Saudi Arabia, may begin discussing reductions in output, Danske Bank?€™s Rasmussen said

Gold gained on mounting concern that governments will struggle to repay rising debt and that slower growth has spurred investors to seek the perceived safety of bullion.

?€œAs long as the financial stress continues in equity markets and the fixed-income market, we believe we?€™ll see gold going higher,?€ Rasmussen said. ?€œThe once unthinkable $2,000 an ounce is no longer impossible. It could easily hit it over the next couple of weeks.?€

Silver futures for December delivery advanced to $42.095 an ounce on the Comex in New York, and platinum climbed 1.3 percent to $1,871.40 an ounce on the New York Mercantile Exchange, the 10th gain in a row.

Copper futures for December delivery rose 2.25 cents, or 0.6 percent, to $4.0085 a pound on the Comex, and gasoline advanced to $2.8326 a gallon on the Nymex.

--Editor: Steve Stroth

--With assistance from Brian Chappatta in Chicago and Chanyaporn Chanjaroen in Singapore. Editors: Steve Stroth, Patrick McKiernan.

To contact the reporter on this story: Sharon Lindores in London at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

To contact the editor responsible for this story: Steve Stroth in Chicago at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Authors: Commodities - Yahoo! News Search Results

Read more: