COMMODITIES-Broad rally on weaker dollar, gold up on U.S. shutdown

Wed Oct 2, 2013 4:57pm EDT

By Barani Krishnan
    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.
    By 4:00 p.m. EDT (2000 GMT), the spot price of bullion
 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%
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