CORRECTED-COMMODITIES-Gold jumps as Fed chief defends stimulus; oil slips
(Corrects 10th paragraph to show Monday's price gain for gold was nearly 1 percent, not 4 percent) * Gold marks biggest advance in months for a second day * Copper rises too after upbeat U.S. housing data * Oil down again on worries over Italian vote * Corn has sharpest rally in 6 weeks; sugar, cocoa tumble By Barani Krishnan NEW YORK, Feb 26 (Reuters) - Gold's biggest rally in months stretched into a second day on Tuesday after the U.S. Federal Reserve chief defended the stimulus program that has stoked gold buying on inflation worries, but oil fell on concern about Italy's elections. Copper edged higher on Fed Chairman Ben Bernanke's defense of the stimulus and on upbeat U.S. housing and consumer confidence data. Copper is a key raw material in home construction and demand for the base metal is often viewed as an indicator of the real economy. Crop prices ended mixed. Corn rose 1.7 percent for its largest run-up in six weeks. Raw sugar hit 2-1/2 year lows and cocoa tumbled as well. Eleven of the 19 commodities on the Thomson Reuters-Jefferies CRB index settled lower, forcing the commodities bellwether to close down 0.2 percent despite the gains in gold, copper and corn. Analysts said concerns over Italy's elections was one of the main factors for the slide. Stunned political parties in Rome searched for a way forward after an inconclusive election gave none of them a parliamentary majority and threatened prolonged instability and a renewal of the European financial crisis. "We suspect that investors will be watching developments in Italy for a few more days," Edward Meir, analyst at INTL FC Stone, said in his daily note on commodities. "Watching all this unfold, one could conclude that we could be imperiling the relative stability achieved in Europe over the past year." GOLD UP MOST SINCE NOV Gold jumped 1.8 percent for its sharpest one-day gain since Nov. 6. In Monday's session, it rose nearly 1 percent for its biggest advance since Oct. 1. The rally has been welcome relief for gold bulls hit most of this month by a selloff in the precious metal after comments by top Fed officials that suggested the U.S. central bank could reduce or halt its bond buying activity that has made inflation-fearing investors to rush into gold. A solid stock market performance this month has also prompted some investors to move money they had in gold into equities. Bernanke, speaking before the U.S. Senate Banking Committee, said Fed policymakers were cognizant of potential risks of a loose U.S. monetary policy. But he said the risks did not seem material for now. "We do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery and more rapid job creation," he said. U.S. gold futures for April delivery settled up $28.90, or 1.8 percent, at $1,615.50 an ounce. The spot price of bullion hovered at above $1,613 by 4:40 p.m. ET (2140 GMT), up 1.3 percent on the day. BRENT HITS 1-MONTH LOW In the energy markets, Brent crude hit a session low of $112.41 a barrel, its weakest since Jan. 24, and settled down $1.73 at $112.71. U.S. crude oil CLc1 was down 48 cents at $92.63 a barrel, after touching a low of $91.92, a level not seen since Jan. 4. Brent had rallied to a nine-month high near $120 in early February but fallen since on signs the global economy was still fragile. Support for Brent fell for the first time since January below the 50-day moving average, which is a key indicator of market sentiment. Gasoline prices slipped as well. New York's benchmark RBOB gasoline for March delivery settled down 2.7 percent, or more than 7 cents a gallon, at $2.9816 a gallon. Prices at 4:56 p.m. EST (2155 GMT) LAST/ NET PCT YTD CLOSE CHG CHG CHG US crude 92.71 -0.40 -0.4% 1.0% Brent crude 112.81 -1.63 -1.4% 1.5% Natural gas 3.427 0.013 0.4% 2.3% US gold 1615.20 29.00 1.8% -3.6% Gold 1613.61 0.50 0.0% -3.6% US Copper 356.65 2.35 0.7% -2.4% LME Copper 7858.50 22.50 0.3% -0.9% Dollar 81.832 0.162 0.2% 6.6% US corn 705.00 11.50 1.7% 1.0% US soybeans 1447.75 -3.50 -0.2% 2.0% US wheat 705.75 6.50 0.9% -9.3% US Coffee 142.90 0.30 0.2% -0.6% US Cocoa 2126.00 -18.00 -0.8% -4.9% US Sugar 17.79 -0.22 -1.2% -8.8% US silver 29.260 0.273 0.9% -3.2% US platinum 1616.50 -4.20 -0.3% 5.1% US palladium 739.40 -9.65 -1.3% 5.1% (Editing by David Gregorio)
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