COMMODITIES-Most markets turn sharply higher after dollar drops
By Carole Vaporean NEW YORK, Aug 15 (Reuters) - After beginning lower, most commodities prices reversed course on Thursday when the dollar turned downward, with natural gas, corn, and gold rallying well over 2 percent, silver jumping more than 5 percent and oil hitting a four-month high. Crude oil prices rose on both sides of the Atlantic, with Brent prices hit a four-month high on fears that escalating violence in Egypt could affect the Suez Canal or spread across the Middle East, where supplies already face disruptions. Front-month September Brent, which expired on Thursday, settled 91 cents higher at $111.11 a barrel, after hitting its highest since April 2. More-active October oil was up 78 cents at $109.60. U.S. oil rose 48 cents to settle at $107.33. While many commodity markets, from coffee and soybeans to crude oil and aluminum, kept the two-day advance going, others trimmed early sizable losses. The Thomson Reuters-Jefferies CRB index of 19-commodities raced up 0.83 percent to a high last reached on April 3. The price measure logged a 1.55 percent gain for the last two sessions and almost 4.25 percent since it began to rise from a one-month bottom on Aug. 7. Gold rose to a near two-month high, gaining 2.3 percent at $1,365.54 as a fall in the dollar triggered short-cover buying and a technical breakout once prices breached a key resistance level at $1,350 an ounce. After falling earlier in the day, gold staged an impressive $50 rally as economic data gave conflicting readings on U.S. growth. "Today's move was mostly driven by technicals, and that spooked the bearish bets out of the gold market," said Axel Merk, chief investment officer at California-based Merk Funds, which manages about $500 million of currency mutual-fund assets. Silver climbed more than 5 percent to $22.96, extending its winning streak to a seventh session, with platinum and palladium also posting steep gains. Palladium was up almost 3.20 percent in late trade. Mixed readings from economic reports muddied views on when the Federal Reserve might begin reducing its stimulus measures. As a result, the dollar fell broadly, but not before it reached August peaks against the euro and yen. Some commodity investors reasoned that either way, prices likely had scope to rally. A pick-up in economic growth should increase demand for raw materials, but if growth continues to drag, interest rates will remain low, keeping dollar gains in check and making commodities cheaper in overseas markets. Data on Thursday showed that claims for U.S. jobless benefits fell to a near-six-year low and consumer prices rose broadly. Talk about the timing of an end to the Fed's bond buying has dominated markets. The U.S. central bank's next policy-setting meeting will be held on Sept. 17-18, when it is widely expected to announce a decision about its monthly bond buying. The latest U.S. manufacturing data came in below expectations, hitting copper. The industrial metal was already down on reports of increased production, though growing confidence about a global economic recovery underpinned prices. Signs that the pace of growth in top metal consumer China is steadying after contracting for more than two years has driven a rally in copper prices this month. Three-month copper on the London Metal Exchange, fell 0.1 percent to $7,309.15 a tonne in after-hours trade. Prices at 3:25 p.m. EDT (1925 GMT) LAST/ NET PCT YTD CLOSE CHG CHG CHG US crude 107.22 0.37 0.4% 16.8% Brent crude 111.10 0.90 0.8% 0.0% Natural gas 3.419 0.077 2.3% 2.0% US gold 1361.60 27.60 2.1% -18.7% Gold 1364.54 29.95 2.2% -18.5% US Copper 3.34 0.00 0.0% -8.6% LME Copper 7309.00 -9.00 -0.1% -7.8% Dollar 81.136 -0.575 -0.7% 5.7% CRB 292.448 2.410 0.8% -0.9% US corn 481.50 16.75 3.6% -31.0% US soybeans 1288.25 18.75 1.5% -9.2% US wheat 637.50 7.00 1.1% -18.1% US Coffee 121.85 -0.80 -0.7% -15.3% US Cocoa 2436.00 -20.00 -0.8% 8.9% US Sugar 17.19 -0.06 -0.3% -11.9% US silver 22.935 22.717 1.7% -24.1% US platinum 1532.30 27.10 0.0% -0.4% US palladium 756.85 16.50 2.2% 7.6%
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DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.