COMMODITIES-Broad rally on weaker dollar, gold up on U.S. shutdown
NEW YORK, Oct 2 (Reuters) - Commodities rallied sharply on Wednesday, with the partial U.S. government shutdown belatedly boosting gold after the previous day's selloff and a weaker dollar lifting oil, copper and most other markets. Some commodities rose on the strength of a better demand outlook. Raw sugar hit 6-1/2 month peaks as traders and investors focused for a second day on the biggest sugar purchase in more than two decades by a single merchant, Louis Dreyfus.
Wheat closed at 11-week highs on bets that slow shipments of the grain out of the Black Sea region could help maintain the brisk pace of U.S. exports. The Thomson Reuters-Jefferies CRB index, a closely-watched indicator for commodity prices, gained nearly 1 percent as 16 of the 19 markets on the index settled in positive territory. The broad commodities rally came after the dollar fell to an eight-month low against the euro following the European Central Bank's decision to hold to current interest rates. Some market participants had expected the ECB to veer toward a rate cut. Gold was also helped by the weaker dollar although its run-up was largely viewed as a delayed reaction to the U.S. government shutdown, which began on Tuesday. was up nearly $30 to $1,315.80 an ounce. The rally of more than 2 percent recouped the bulk of gold's losses in the previous session. Bullion fell about $40 on Tuesday, near a two-month bottom of below $1,283, as some investors dumped their gold holdings on frustration with the market's inability to rally immediately after the U.S. government shutdown. Gold is basically seen as a hedge against economic and political troubles. In Wednesday's session, U.S. stocks ended lower for a second straight day. Data from private processor ADP showed U.S. private employers adding fewer jobs than expected in September, providing further support to gold as a safe-haven.
"If the economic numbers continue to be weaker than expected, we may see a slide in the dollar, and money in equities flow back into Treasuries and metals for the time being," said a Tom Power, senior commodities trader at futures brokerage R.J. O'Brien. In oil, U.S. crude settled up 2 percent at $104.10 a barrel. Benchmark Brent crude out of London gained 1.2 percent to finish at $109.19. Copper rose off a one-week low. Benchmark three-month copper on the London Metal Exchange CMCU3 closed up 1.13 percent at $7,279 a tonne, up from $7,199 on Tuesday.
Prices at 4:30 p.m. EDT (2030 GMT)
LAST/ NET PCT YTD CLOSE CHG CHG CHG US crude 103.83 1.79 1.8% 13.1% Brent crude 109.07 1.13 1.1% -1.8% Natural gas 3.542 -0.067 -1.9% 5.7% US gold 1320.70 34.60 2.7% -21.2% Gold 1316.26 30.27 2.4% -21.4% US Copper 3.31 0.04 1.2% -9.3% LME Copper 7279.00 80.00 1.1% -8.2% Dollar 79.898 -0.243 -0.3% 4.1% CRB 286.444 2.424 0.9% -2.9% US corn 439.00 0.00 0.0% -37.1% US soybeans 1273.75 5.75 0.5% -10.2% US wheat 686.00 4.75 0.7% -11.8% US Coffee 114.45 0.35 0.3% -20.4% US Cocoa 2632.00 -2.00 -0.1% 17.7% US Sugar 17.48 0.00 0.0% -10.4% US silver 21.846 21.635 1.7% -27.7% US platinum 1389.80 8.10 0.0% -9.7% US palladium 720.20 2.30 0.3% 2.4%