By Barani Krishnan
NEW YORK, Oct 2 (Reuters) - Commodities rallied sharply on
Wednesday, with the partial U.S. government shutdown belatedly
boosting gold after the previous day's selloff and a weaker
dollar lifting oil, copper and most other markets.
Some commodities rose on the strength of a better demand
Raw sugar hit 6-1/2 month peaks as traders and investors
focused for a second day on the biggest sugar purchase in more
than two decades by a single merchant, Louis Dreyfus.
Wheat closed at 11-week highs on bets that slow shipments of
the grain out of the Black Sea region could help maintain the
brisk pace of U.S. exports.
The Thomson Reuters-Jefferies CRB index, a
closely-watched indicator for commodity prices, gained nearly 1
percent as 16 of the 19 markets on the index settled in positive
The broad commodities rally came after the dollar
fell to an eight-month low against the euro following the
European Central Bank's decision to hold to current interest
rates. Some market participants had expected the ECB to veer
toward a rate cut.
Gold was also helped by the weaker dollar although its
run-up was largely viewed as a delayed reaction to the U.S.
government shutdown, which began on Tuesday.
By 4:00 p.m. EDT (2000 GMT), the spot price of bullion
was up nearly $30 to $1,315.80 an ounce. The rally of
more than 2 percent recouped the bulk of gold's losses in the
Bullion fell about $40 on Tuesday, near a two-month bottom
of below $1,283, as some investors dumped their gold holdings on
frustration with the market's inability to rally immediately
after the U.S. government shutdown. Gold is basically seen as a
hedge against economic and political troubles.
In Wednesday's session, U.S. stocks ended lower for a second
straight day. Data from private processor ADP showed U.S.
private employers adding fewer jobs than expected in September,
providing further support to gold as a safe-haven.
"If the economic numbers continue to be weaker than
expected, we may see a slide in the dollar, and money in
equities flow back into Treasuries and metals for the time
being," said a Tom Power, senior commodities trader at futures
brokerage R.J. O'Brien.
In oil, U.S. crude settled up 2 percent at $104.10 a
barrel. Benchmark Brent crude out of London gained 1.2
percent to finish at $109.19.
Copper rose off a one-week low. Benchmark three-month copper
on the London Metal Exchange CMCU3 closed up 1.13 percent at
$7,279 a tonne, up from $7,199 on Tuesday.
Prices at 4:30 p.m. EDT (2030 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US crude 103.83 1.79 1.8% 13.1%
Brent crude 109.07 1.13 1.1% -1.8%
Natural gas 3.542 -0.067 -1.9% 5.7%
US gold 1320.70 34.60 2.7% -21.2%
Gold 1316.26 30.27 2.4% -21.4%
US Copper 3.31 0.04 1.2% -9.3%
LME Copper 7279.00 80.00 1.1% -8.2%
Dollar 79.898 -0.243 -0.3% 4.1%
CRB 286.444 2.424 0.9% -2.9%
US corn 439.00 0.00 0.0% -37.1%
US soybeans 1273.75 5.75 0.5% -10.2%
US wheat 686.00 4.75 0.7% -11.8%
US Coffee 114.45 0.35 0.3% -20.4%
US Cocoa 2632.00 -2.00 -0.1% 17.7%
US Sugar 17.48 0.00 0.0% -10.4%
US silver 21.846 21.635 1.7% -27.7%
US platinum 1389.80 8.10 0.0% -9.7%
US palladium 720.20 2.30 0.3% 2.4%