Strong GDP Growth, Weak Dollar Drive Up Commodities
Commodities prices rebounded Thursday, buoyed by a falling dollar and a stronger-than-expected reading on the economy.
The dollar fell against other major currencies for the first time in five days, making commodities more attractive to foreign buyers. The ICE Futures US dollar index, a measure of the dollar against a basket of currencies, slipped 0.7 percent in afternoon trading after gaining 2 percent over the past week.
Investors were also encouraged Thursday by the Commerce Department’s report that gross domestic product, the broadest measure of economic activity, rose at an annual rate of 3.5 percent in the third quarter.
The growth in GDP, which was more than economists had been expecting, was the most telling sign yet that the longest recession since the 1930s has ended.
The report reignited investors’ confidence in an economic rebound, which had waned in recent days amid disappointing readings on housing and consumer confidence, and drove them to put money in riskier assets like stocks and commodities that depend on a robust economy.
Gold for December delivery jumped $16.60 to $1,047.10 an ounce on the New York Mercantile Exchange.
December silver soared 41.5 cents, or 2.6 percent, to $16.655 an ounce, while December platinum rose $31.30, or 2.4 percent, to $1,335 an ounce. Palladium rallied 3.4 percent.
Among industrial metals, December copper futures rose 9.9 cents to $3.0295 a pound.
Elsewhere on the Nymex, energy prices gained as the dollar fell. Reports from global oil companies that crude production grew during the third quarter also supported higher energy prices.
Light, sweet crude for December delivery jumped $2.41 to $79.87 a barrel. Gasoline futures rose 3.26 cents to $2.019 a gallon, while heating oil futures rose 5.73 cents to $2.0542 a gallon.
On the Chicago Board of Trade, December wheat futures gained 9 cents to $5.0375 a bushel, while corn for December delivery added 10.5 cents to $3.7950 a bushel.
January soybeans rose 16.5 cents to $9.87 a bushel.
Among other soft commodities, December coffee rose 2.15 cents to $1.3675 a pound, and March sugar rose 0.88 cent to 22.81 cents a pound.
10/29/2009 4:46 PM SARA LEPRO, AP Business Writer NEW YORK