Gold Rises on Demand for Alternative Asset: Commodities at Close

Gold jumped on demand for an alternative investment as the dollar weakened. Yesterday gold made its biggest gain so far this month after it has been falling over the past few days.

December 20, 2011, 1:27 PM EST
By John Deane
Business Week

Dec. 20 (Bloomberg) -- The Standard & Poor’s GSCI gauge of 24 commodities rose 2.4 percent to 634.39 as of 5:58 p.m. in London. The UBS Bloomberg CMCI index of 26 raw materials was up 1.7 percent at 1,499.793.

PRECIOUS METALS

Gold rose, heading for the biggest gain this month, as the weakening dollar boosted demand for the metal as an alternative asset.

Gold futures for February delivery climbed 1.5 percent to $1,620.20 an ounce on the Comex in New York. Silver futures for March delivery gained 2.2 percent to $29.505 an ounce on the Comex, paring its loss this year to 4.6 percent.

Precious metal markets: NI PCMKTS

BASE METALS

Copper rose in New York after a report showed U.S. housing starts rose last month, boosting the outlook for metals demand.

Copper futures for March delivery gained 1.8 percent to $3.369 a pound on the Comex in New York. On the London Metal Exchange, copper for delivery in three months rose 2.1 percent to $7,409.50 a metric ton ($3.36 a pound).

Aluminum, zinc, lead, nickel and tin also climbed in London.

Base metals markets: NI BMMKTS

GRAINS, OILSEEDS

Corn and soybeans rose on speculation that scattered showers forecast for Brazil and Argentina this week will fail to bring relief to crops after hot, dry weather reduced soil moisture. Wheat gained.

Corn futures for March delivery rose 0.7 percent to $6.055 a bushel on the Chicago Board of Trade, heading for the first three-day gain since Nov. 30.

Soybean futures for January delivery climbed 0.6 percent to $11.54 a bushel on the CBOT. Wheat futures for March delivery rose 0.9 percent to $6.0525 a bushel, gaining for the third straight session.

Grain markets: NI GRMKTS

NATURAL GAS

Natural gas futures pared early gains in New York as high inventories and mild weather pressured prices even as traders covered bearish bets.

Gas rose as much as 1.4 percent after settling yesterday at their lowest level in more than two years. Natural gas for January delivery gained 0.4 cent, or 0.1 percent, to $3.10 per million British thermal units on the New York Mercantile Exchange.

U.K. natural gas for January rose as pipeline deliveries from Norway declined and the network manager forecast lower supply.

Next-month gas climbed as much as 0.95 pence, or 1.7 percent, to 57.1 pence a therm, according to broker prices compiled by Bloomberg. It was at 56.5 pence recently, equal to $8.86 a million British thermal units. Power for January rose 84 pence to 44.75 pounds ($70.15) a megawatt-hour.

U.K. natural gas: NI NUKMKT Gas market: NI GASMARKET Americas natural gas: NI AGASMARKET European natural gas: NI EGASMARKET

CRUDE OIL

Oil rose for a second day as U.S. builders broke ground on more houses than at any time in the past 19 months and on speculation that further sanctions against Iran will curb supply.

Crude for January delivery gained $3.34, or 3.6 percent, to $97.22 a barrel on the New York Mercantile Exchange. The contract expires today. Brent oil for February settlement on the London-based ICE Futures Europe exchange increased $3.41, or 3.3 percent, to $107.05.

Crude oil futures: NI CRMKTS

SOFT COMMODITIES

Coffee climbed to a one-week high in New York as Vietnam delays sales and on mounting signs that crops will decline in Brazil and Colombia. Sugar and cocoa also advanced.

Arabica coffee for March delivery gained 1.6 percent to $2.23 a pound on ICE Futures U.S. in New York. In London, robusta-coffee futures for March delivery rose 0.7 percent to $1,891 a metric ton on NYSE Liffe.

Cocoa futures for March delivery climbed 3.9 percent to $2,150 a ton in New York. Raw-sugar futures for March delivery rose 2.1 percent to 23.57 cents a pound on ICE, heading for the biggest gain since Dec. 8. Refined-sugar futures for March delivery gained 1.7 percent to $609.70 a ton on NYSE Liffe.

Cotton rose for the third time in four sessions as the dollar dropped, and Pakistan, the world’s fourth-largest grower, said domestic demand will exceed output. Orange juice declined.

Cotton for March delivery rose 1 percent to 88 cents a pound on ICE Futures U.S. in New York. Orange-juice futures for March delivery declined 0.3 percent to $1.6365 a pound on ICE.

Soft commodities markets: NI SOMKTS

OIL PRODUCTS

European diesel barges advanced as PetroChina Co. bought for at least a seventh day. Morgan Stanley and Vitol Group sought to purchase jet fuel on the barge market, without finding sellers.

Naphtha traded at the highest level relative to Brent in 11 weeks, buoyed by demand from Asia. Gasoline’s premium to Brent, or crack, rose to the biggest in more than seven weeks.

European naphtha’s discount to Brent narrowed to $4.33 a barrel, the least since Oct. 4, according to PVM Oil Associates Ltd., a London-based broker.

Gasoline for immediate loading in northwest Europe traded from $888 to $903 a metric ton, according to a Bloomberg survey of traders and brokers monitoring the Argus Bulletin Board and Platts pricing window. The Eurobob fuel, to which ethanol is added before being sold at the pump, traded from $880 to $891 yesterday. Those prices are for barge lots, usually of 1,000 or 2,000 tons.

Gasoil advanced to a three-day high on the ICE Futures Europe exchange in London.

The January contract added as much as $19.75, or 2.2 percent, to $907.25 a ton, the most since Dec. 15 and was at $900.50 a ton recently. Barges of the heating oil traded at a $1 premium to front-month gasoil futures, little changed from yesterday, the survey showed.

Oil Products Europe: NI OPEMKT EU Carbon Emissions: NI ECBMKT

LIVESTOCK

Cattle fell on signs that demand from U.S. meatpackers is slowing. Hogs also dropped.

Cattle futures for February delivery fell 0.2 percent to $1.2125 a pound on the Chicago Mercantile Exchange. Prices climbed by the 3-cent exchange limit yesterday. Before today, the commodity rose 12 percent this year.

Hog futures for February settlement slid 0.2 percent to 84.2 cents a pound in Chicago. Feeder-cattle futures for March settlement dropped 0.1 percent to $1.47525 a pound on the CME.

Livestock markets: NI LVMKTS

--Editor: John Deane

To contact the reporter on this story: John Deane in London at jdeane3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net -0- Dec/20/2011 18:05 GMT

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