Commodities Rise for Second Day, Led by Metals on China’s Demand

The Standard & Poor?€™s GSCI Index of 24 raw materials rose 0.8 percent to 633.01 at 12:03 p.m. New York time. Metals including lead and copper led the rally. Corn, wheat and soybeans jumped after the U.S. government forecast smaller crops. Gold headed for the biggest drop in almost six weeks.

?€œThings may not be as bad as some people were predicting,?€ Tom Mangan, who helps oversee $2.8 billion at James Investment Research Inc. in Xenia, Ohio, said in a telephone interview. ?€œThe chances of a recession might seem somewhat less today as reflected by stock prices, and, of course, if the economy is going to grow, then demand for commodities will grow.?€

On Aug. 8, investors dumped equities and most raw materials for the relative safety of Treasuries, the Swiss franc and gold amid mounting concern over a faltering global economy and mounting debt woes in the U.S. and Europe. Today, the Standard & Poor?€™s 500 Index jumped as much as 3.2 percent, and the franc tumbled.

?€œIt?€™s now back a little bit to risk-on trade,?€ said David Thurtell, the head of metal research at Citigroup Inc. in Singapore. The Chinese yuan?€™s jump ?€œis definitely good for commodities as that allows China to import more, and it?€™s a sign that the government is confident enough about the strength of domestic demand and cares less about exports,?€ he said.

The Chinese currency strengthened beyond 6.4 per dollar for the first time in 17 years after the Federal Reserve pledged to keep U.S. interest rates at a record low.

Lead, Corn

In London, lead jumped as much as 5.1 percent. Copper futures in New York climbed 3.3 percent, heading for the biggest gain since March 17. In Chicago, corn jumped as much as 4.4 percent.

Gold fell 1.2 percent after CME Group. Inc boosted margins on Comex contracts, prompting investor sales after a three-day rally to a record topping $1,800 an ounce.

The GSCI index jumped 2.5 percent yesterday, led by precious metals.

--Editors: Patrick McKiernan, Steve Stroth

To contact the reporters on this story: Yi Tian in New York at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; 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 at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Authors: Commodities - Yahoo! News Search Results

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