Tags: Gold | Silver | Comeback | Metals

Gold, Silver Pace Early-Year Comeback Among Metals

Thursday, 02 Feb 2012 01:57 PM

Commodity prices slumped last year amid concern about Europe’s debt crisis and sluggish global economic growth, but now they’re coming back with a vengeance.

Gold soared 11 percent in January, and silver jumped 19 percent, The Wall Street Journal reports. Copper, aluminum and other industrial metals also registered double-digit percentage gains, led by tin's 29 percent surge.

Crop prices are getting in on the action too, with corn gaining 10 percent and wheat 15 percent since mid-December.

Lessened fears about Europe and the U.S. economy have powered the rally. And the Federal Reserve’s announcement last month that it plans to keep interest rates near record lows through late 2014 could fuel further gains.

"We definitely see an impact" from the Fed’s statement, David Greely, chief commodities strategist at Goldman Sachs, tells The Journal. "It gives people more confidence in the economic recovery."

The Fed’s policy will especially benefit gold, which investors use as a hedge against inflation, he says. And the policy will stimulate demand for oil, copper, and other commodities, boosting their prices as well, Greely says.

Experts say continued strong economic growth in China will help commodities too.

So bullishness is pervasive. "It appears if we can avoid any major financial hiccups, we could be looking at a strong [commodities] market for the balance of the year," Sterling Smith, an analyst at Country Hedging, tells The Associated Press.



© 2017 Thomson/Reuters. All rights reserved.

 
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2012-57-02
Thursday, 02 Feb 2012 01:57 PM
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