September 7, 2012 / 7:22 PM / 6 years ago

COMMODITIES-Rally on QE3 bets; gold at 6-month high

* Weak US jobs data for Aug reignites Fed stimulus hopes
    * Gold up 2 pct on day and 3 pct on week
    * Copper up 4 pct on day and week, hits May highs
    * Oil up for 3rd straight day

    By Barani Krishnan
    NEW YORK, Sept 7 (Reuters) - Commodities rose broadly on
Friday as the dollar fell to a near four-month low against the
euro after disappointing U.S. job numbers for August led to bets
there will be more stimulus for the world's largest economy.
    Gold prices rushed to a six-month peak, copper hit a near
4-month high and oil rose for a third day as investors
speculated the Federal Reserve will launch a third round of
quantitative easing or bond buying to help the U.S. economic
    Logically, any Fed easing tends to boost asset prices,
including that of commodities, as it weakens the dollar. The
dollar fell to as low as $1.2806 against the euro, its
weakest level since late May. 
    The Fed is due to hold a policy meeting next week and focus
over a possible QE3 intensified after monthly jobs data from the
Labor Department showed U.S. non-farm payrolls increased only by
96,000 in August, against market expectations for a 125,000
    "It was a decidedly negative report," John Kilduff, partner
at Again Capital LLC, a commodities-focused hedge fund in New
York, said, referring to the jobs numbers.
    Fed Chairman Ben Bernanke said last week the labor market's
stagnation was a "grave concern," a comment that raised
expectations for a further easing of monetary policy as soon as
the central bank's meeting next Wednesday and Thursday. 
    But Duncan Hobbs, a metal markets analyst with Macquarie in
London, doubted the rally in commodities would last if Fed did
not indicate soon that a fresh stimulus was on the way.
    "Prices are rising in anticipation of a potential policy
response to a weak situation," Hobbs said.
    "There is nothing fundamentally to warrant the rise in
prices, absolutely nothing. If stimulus doesn't come or doesn't
work, then these markets are rising on air."
    The Thomson Reuters-Jefferies CRB index, the
commodity market bellwether, rose 1 percent on the day after 14
of the 19 markets it tracked stood in positive territory. Aside
from metals and oil, other major gainers on the CRB were coffee
, which rose more than 3 percent, and wheat, which
gained around 2 percent.
    U.S. gold futures settled at $1,740.50 an ounce after
hitting a six-month peak of $1,745.40. For the day, the market
was up 2 percent and on the week, it rose 3 percent for its
third straight positive week.
    Gold had seen giddy price action since Thursday, rushing to
its loftiest since early March after the European Central Bank
unveiled a new and potentially unlimited bond purchase plan to
lower borrowing costs of debt-laden nations, in the latest
effort to fight the euro zone debt crisis. 
    "Gold is going through the roof because this negative (U.S.
jobs) data makes QE3 more likely now," said Daniel Briesemann,
commodities analyst at Commerzbank in Frankfurt. 
    Three-month copper on the London Metal Exchange 
ended at $7,990 a tonne, from a last bid of $7,700 on Thursday,
having earlier hit the psychologically important $8,000 a tonne,
its highest since mid-May.
    Aside from speculation over the QE3, copper prices were also
bid up by China's approval of a multi-billion dollar
infrastructure programme.
    China, the world's largest consumer of copper, gave the
green light for 60 infrastructure projects worth more than $150
billion to energize an economy mired in its worst slowdown in
three years.
    Copper is used heavily in construction and power cabling and
China plans to build highways, ports and airport runways in one
of the most ambitious projects unveiled this year that signals a
growing intent to bolster economic growth as Beijing's
once-a-decade leadership change looms. 
    Reuters data on Friday showed the London copper market's
100-day moving average at $7,665, meaning current prices were
well above that closely-watched technical level. Aluminium
, zinc and lead also hit multi-month
highs during the session.
    U.S. copper futures' most-actively traded contract, December
, rose nearly 4 percent for both the session and week,
settling at $3.6450 a lb. It hit a four-month high of $3.6525
during the session. 
    U.S. crude oil rose for a third straight day,
settling 1 percent higher at $96.42 a barrel. 
 Prices at 3:01 p.m. EDT (1901 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    96.50     0.97   1.0%   -2.4%
 Brent crude                114.35     0.86   0.8%    6.5%
 Natural gas                 2.682   -0.094  -3.4%  -10.3%
 US gold                   1740.50    34.90   2.0%   11.1%
 Gold                      1737.51    36.47   2.1%   11.1%
 US Copper                  365.60    13.25   3.8%    6.4%
 Dollar                     80.258   -0.779  -1.0%    0.1%
 CRB                       311.660    2.770   0.9%    2.1%
 US corn                    801.50     1.00   0.1%   24.0%
 US soybeans               1745.75     0.00   0.0%   45.7%
 US wheat                   903.75     0.00   0.0%   38.5%
 US Coffee                  163.05     4.85   3.1%  -28.5%
 US Cocoa                  2676.00   -15.00  -0.6%   26.9%
 US Sugar                    19.38     0.51   2.7%  -16.6%
 US silver                  33.633    1.014   3.1%   20.5%
 US platinum               1595.30     9.90   0.6%   13.6%
 US palladium               654.00     7.00   1.1%   -0.3%
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