Monday, August 29, 2011

Commodities rise on US economic growth forecast (AP)

Commodities rose broadly Friday after Federal Reserve Chairman Ben Bernanke said the economy should improve over time, even though it still needs near-term help.

In an address at Jackson Hole, Wyo., Bernanke said the Fed is prepared to use other measures, as needed, to promote economic growth and would meet for two days next month to hold a "fuller discussion."

He also suggested that Congress needs to do more to promote hiring and growth, or risk delaying the economy's return to full health. Bernanke's comments seemed to encourage investors. Most commodity prices were lower before Bernanke's speech but finished higher.

Analysts had expected Bernanke to make few, if any, changes from the position outlined earlier this month in which Fed policymakers said they would leave interest rates near zero at least through mid-2013. They also said it was possible they would take other steps, such as another round of bond purchases, to stimulate growth.

Earlier Friday the government lowered its estimate of second-quarter U.S. economic growth to an annual pace of just 1 percent, below its earlier estimate of 1.3 percent.

Kingsview Financial analyst Matt Zeman said he believes the market already accounted for the slowing economy and the possibility that Bernanke would not unveil any new measures to help growth.

That left investors most of the day to reposition their holdings ahead of the weekend as Hurricane Irene began delivering rain to the East Coast.

MF Global senior market strategist Rich Ilczyszyn said he believes investors have to look at each individual commodity market to get an idea of future demand and supplies. He said the market should remain robust because consumers will still need to buy gasoline and food, and industrial metals will be needed for rebuilding infrastructure.

It was a volatile week for gold trading. Gold for December delivery rose $34.10 to finish at $1,797.30 an ounce after nearly hitting $1,900 an ounce as Monday's trading ended.

In other metals trading, September silver rose 20.7 cents to $40.952 an ounce, September copper increased 2 cents to $4.099 per pound, October platinum rose $4.50 to $1,826.90 an ounce and September palladium increased $5.20 to $756.35 an ounce.

Benchmark crude rose 7 cents to end at $85.37 per barrel on the New York Mercantile Exchange.

In other Nymex trading, heating oil rose 2.26 cents to $3.0158 per gallon, gasoline fell 1.57 cents to finish at $2.786 per gallon and natural gas increased 0.6 cent to $3.912 per 1,000 cubic feet.

December wheat rose 9.25 cents to finish at $7.97 a bushel, December corn increased 23.5 cents to $7.67 a bushel and November soybeans rose 30.75 cents to $14.235 a bushel.

Source: http://us.rd.yahoo.com/dailynews/rss/business/*http%3A//news.yahoo.com/s/ap/20110826/ap_on_bi_ge/us_commodities_review

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