Tags: copper

Copper Hits 2-Week High on Stimulus Speculation

Thursday, 26 April 2012 04:52 PM

Commodities ended broadly higher on Thursday, with copper one of the biggest gainers, after high claims for jobless benefits in the United States fueled expectations that the Federal Reserve may approve another U.S. economic stimulus.

Investors also bought oil and other key commodities as U.S. housing data that showed contracts to purchase previously owned homes was near a two-year high in March, and on a weaker dollar which boosts demand for dollar-denominated raw materials.

The dollar fell a day after Fed Chairman Ben Bernanke said the central bank was willing to do more -- including approving a new stimulus -- to help U.S. recovery.

"Yesterday's Fed proclamation that they are prepared to take additional easing steps even in the face of slightly positive growth" is weakening the dollar, said Alexander Chepurko, foreign exchange analyst at Forex Club in New York.

Commodity prices have risen before when the Fed engaged in two rounds of asset purchases to stimulate the economy.

The Thomson Reuters-Jefferies CRB index, a global commodities benchmark, settled nearly half a percent up after 13 of the 19 markets it tracks rose.

Nickel, a base metal used for making stainless steel, emerged as the CRB's biggest gainer, surging more than 3 percent.

Copper rose 2 percent to take the third spot on the CRB after silver, which rallied along with gold amid the weaker dollar.

Raw sugar was the biggest loser of the day, falling 2.5 percent and hitting 11-month lows as the trade braced for deliveries in the soon-to-expire front-month contract.

The London Metal Exchange's benchmark copper contract ended at $8,322 per tonne versus a last bid of $8,205 on Wednesday. Gains were extended in after-hours business to $8,340, the highest since April 10.

In New York, the most-active July COMEX copper contract, which influences the CRB, jumped 6.60 cents, or 1.8 percent, to settle at $3.7735 per pound.

On the agricultural side, U.S. wheat futures rose 1.5 percent as temperature extremes in different parts of the country posed a threat to domestic wheat output. In Europe, a turn to warm and dry weather in some wheat areas exacerbated concerns about crop damage.

Wheat also got another boost when the International Grains Council cut its forecast for 2012/13 global wheat output by 5 million tonnes to 676 million tonnes.

Data showed the number of Americans lining up for new jobless benefits fell slightly last week but remained above levels posted earlier this year, suggesting improvement in the labor market was stalling.

© 2018 Thomson/Reuters. All rights reserved.

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Thursday, 26 April 2012 04:52 PM
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