COMMODITIES-Dollar's fall sparks biggest rally since 2013 start

Thu Jan 10, 2013 9:55pm GMT

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* Sign of steady ECB rates pushes dollar lower vs euro
    * China's supportive trade data further fans risk appetite
    * Saudi output cuts boost oil, natgas up on bullish US draws

    By Barani Krishnan
    NEW YORK, Jan 10 (Reuters) - Commodities rallied their most
on Thursday since the start of the year as signs that European
interest rates might hold pushed the dollar sharply lower
against the euro, boosting raw materials priced in the U.S.
currency.
    Supply and demand factors also influenced a run-up in crude
oil and natural gas prices.
    London's Brent crude neared three-month high and
U.S. crude hit a four-month peak before paring gains at
the close on news that No. 1 oil producer Saudi Arabia had cut
output. Supportive economic data from China further fanned
expectations for oil demand.  
    U.S. natural gas ended up the first time in four
sessions, underpinned by a government report showing a weekly
inventory withdrawal well above market expectations. 
    In the currency markets, the euro hit a one-week peak
against the dollar and catapulted to an 18-month high versus the
yen after the European Central Bank gave no indication of
cutting rates. Robust Chinese export data also helped assuage
concerns about global growth, pushing the euro higher. 
    The Thomson Reuters-Jefferies CRB index settled up
nearly 1 percent. The last time the commodities bellwether rose
that much was on Dec. 26.
    
    BROADEST RUN-UP SINCE YEAR'S START
    It was also the index's broadest rally since the year began,
with 13 of the CRB's 19 markets finishing in positive territory.
 
    U.S. natural gas rose nearly 3 percent to lead the run-up.
Silver, aluminium and cocoa gained about
2 percent each while sugar, coffee and gold
 all climbed more than 1 percent. 
    Even so, some analysts expressed skepticism that the upward
momentum would hold, noting that trading volumes were not
encouraging.
    "This week is the first full week of trading in 2013 and
volumes are not spectacular," said Robin Bhar, an industrial
metals analyst at Societe Generale.
    "There is still caution around, and I think some of the
rallies may be not sustainable."
    Among key commodities, benchmark Brent crude oil 
closed up 0.1 percent at $111.89 a barrel after rallying to a
12-week high of $113.29. U.S. crude finished up 0.8
percent at $93.82 after reaching a Sept. 19 peak of $94.70.
    Oil prices surged after Saudi Arabia slashed crude
production by 700,000 barrels per day to 9 million bpd during
the last two months of 2012, according to industry sources.
Major customers for Saudi crude said the cuts were driven by
lower demand.  
    In copper, the three-month futures contract on the London
Metal Exchange ended up 0.4 percent at $8,110 a tonne.
In New York, March copper on COMEX finished up 1 percent
at $3.7090 a lb.
    Copper prices rose after data showing the value of exports
in top metals buyer China growing 14.1 percent last month
compared with a year earlier, racing past the forecasts of
analysts polled by Reuters, who had expected annual growth of 4
just percent.  
    U.S. gold futures for February settled up 1.4
percent at $1,678 an ounce on Thursday, notching its biggest
one-day gain in 2013, as signs that the European Central Bank
will not cut interest rates any time soon boosted bullion
buying.
    
 Prices at 4:18 p.m. EST (2118 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    93.87     0.77   0.8%    2.2%
 Brent crude                111.75    -0.01   0.0%    0.6%
 Natural gas                 3.193    0.080   2.6%   -4.7%
 
 US gold                   1678.00    22.50   1.4%    0.1%
 Gold                      1673.44    16.10   1.0%   -0.1%
 US Copper                  370.90     3.85   1.0%    1.5%
 LME Copper                8115.00    35.00   0.4%    2.3%
 Dollar                     79.796   -0.761  -0.9%    3.9%
                             
 
 US corn                    698.75     4.50   0.7%    0.1%
 US soybeans               1417.50    -2.25  -0.2%   -0.1%
 US wheat                   744.50    -1.00  -0.1%   -4.3%
 
 US Coffee                  149.65     1.75   1.2%    4.1%
 US Cocoa                  2269.00    46.00   2.1%    1.5%
 US Sugar                    18.96     0.24   1.3%   -2.8%
 
 US silver                  30.918    0.669   2.2%    2.3%
 US platinum               1632.40    34.60   2.2%    6.1%
 US palladium               702.20    14.00   2.0%   -0.2%
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