* Gold gains over 1 percent on physical buying, Chinese
* Oil settles modestly higher on fears of more Middle East
* Copper falls on fears China's higher prices will hamper
* Soft commodities all rise; grains gain on hot weather
By Carole Vaporean
NEW YORK, July 9 Chinese inflation data lifted
gold to a one-week high and fears of further violence in Egypt
kept oil prices firm despite the dollar's rally on Tuesday, but
copper gave in to the dollar's strength as well as concerns
about the impact of rising prices on China's growth.
At the Chicago Board of Trade, corn and soybean futures rose
for a second straight session on worries that hot, dry weather
in parts of the U.S. Midwest could stress crops later this
Wheat rose 2 percent as recent export demand from China and
signs that the U.S. harvest is winding down triggered a round of
Meanwhile, soft commodities coffee, cocoa and sugar gained.
Robusta coffee futures on Liffe rose to a one-month high, as
producers waited for higher prices before selling and
speculators covered a large net short position. But ICE arabica
coffee futures fell, pressured by Brazilian supplies as the
harvest there picked up pace.
Cocoa futures gained on concerns that unfavorable weather
would slow output in West Africa, and raw sugar on ICE Futures
U.S. eked out a second straight day of gains.
The 19-commodity Thomson Reuters-Jefferies CRB index
extended its gains to near three-week highs, around
284, lifted by higher prices of precious metals, grains, softs
Gold posted a one-week high, rising more than 1 percent on
physical buying and as China's inflation data increased the
metal's appeal as a hedge against rising prices.
"Clearly there is some dislocation in the physical market
and maybe because demand has been surprisingly strong, that has
caused some temporary shortages," said Societe Generale analyst
Robin Bhar, adding that there has been a lot of gold borrowing
in the last 24 hours.
Data showed China's annual consumer inflation accelerated
more than expected in June, but factory-gate deflation persisted
for a 16th month. The report underscored the policy dilemma
facing the People's Bank of China as it worries about long-term
price risks while economic growth slows.
Spot gold was up 1.03 percent at $1,248.66 per ounce
at 4:10 p.m. EDT (2010 GMT) after rising earlier to $1,260, its
highest level since July 2. Comex gold climbed $12, or
0.97 percent, to $1,246.90 an ounce.
Copper, however, was down as the dollar rose and China's
inflation data reinforced worries about slowing growth in the
world's top copper consumer, though risk appetite in the wider
markets and oversold conditions kept losses in check.
The U.S. dollar rallied to a three-year high against major
currencies, extending a bullish run on expectations that the
Federal Reserve will reduce stimulus at a time when other major
central banks are likely to ease further.
Three-month copper on the London Metal Exchange
closed at $6,730 a tonne, down from $6,830 on Monday.
Crude oil prices on both sides of the Atlantic ended with
moderate gains, supported by the stock market's advance and
worries over Egypt, but were limited by a strong U.S. dollar and
as supplies were brought back online.
Brent crude oil futures ended 38 cents higher at
$107.81 per barrel. U.S. crude oil futures rose 39 cents
to settle at $103.53, after trading as low as $102.31.
Fears that violence in Egypt could ignite conflict in the
broader Middle East, which pumps a third of the world's oil,
continued to support oil prices.
While oil prices shaved some gains, Brent was still hovering
at a three-month high and U.S. crude at a 14-month peak.
(Additional reporting by Jeanine Prezioso, Chris Prentice,
Wanfeng Zhou, and Herb Lash in New York, Maytaal Angel and Clara
Denina in London, and Julie Ingwersen in Chicago; Editing by Jan