By Barani Krishnan
NEW YORK, Sept 18 Gold surged more than 4
percent on Wednesday, its biggest daily rise since June 2012,
and oil and most other commodities rose too after the Federal
Reserve surprised investors, saying it would maintain the same
level of U.S. economic stimulus.
The dollar hit a seven-month low, bolstering the
value of commodities priced in the currency, after the Fed said
it would await evidence of a more stable economy before reducing
its monthly purchase of $85 billion in U.S. bonds.
Stocks on Wall Street hit record highs as the
Fed stunned investors expecting central bank policy makers to
announce a reduction in its stimulus program.
"There is no immediate visibility as to how much tapering
will be done and when, so devaluation of currencies marches on,"
said Jeffrey Sica, chief investment officer at New Jersey-based
Sica Wealth Management, which has over $1 billion in client
assets. "And as long as that happens, gold looks attractive."
The spot price of gold was up 4.2 percent to
$1,364.60 an ounce by 5:25 p.m. EDT (2125 GMT), its biggest
one-day percentage gain since June 1, 2012. It rebounded about
$70, or 5.5 percent, from a 6-week low of $1,291.34 earlier in
In gold futures traded on New York's COMEX, the benchmark
December contract jumped as much as $60, after
officially closing the session up just $1.80 prior to the Fed
Gold also got a boost from a White House official's remarks
that the current Federal Reserve Vice Chair Janet Yellen would
be a leading candidate to replace Fed chief Ben Bernanke when he
steps down. Gold traders said Yellen, a strong supporter of
Bernanke's policies, should keep U.S. interest rates low for an
extended period of time.
The Thomson Reuters-Jefferies CRB index, which
tracks 19 futures markets, rose nearly 1 percent for its
sharpest gain since June 3. Besides gold, major gainers on the
index were crude oil and gasoline, up about 3 percent each.
Oil posted its biggest daily rise in three weeks.
Benchmark Brent crude oil out of Europe's North Sea
settled up $2.41 at $110.60 a barrel, rebounding from the
previous session's six-week low.
U.S. crude finished up $2.65 at $108.07.
Oil was also supported by data showing U.S. crude oil
inventories falling to their lowest level since March 2012.
Oil had also been pressured this week after world powers
held talks to eliminate Syria's chemical weapons without the
need for military action. This eased concerns that oil supply
from the Middle East would be at risk.
Copper's most-active December contract on COMEX rose
almost 3 percent to as high as $3.3205 per lb, its highest level
since Sept. 3.
Prices at 5:13 p.m. EDT (2113 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US crude 108.31 2.89 2.7% 18.0%
Brent crude 110.62 2.43 2.3% -0.4%
Natural gas 3.713 -0.032 -0.9% 10.8%
US gold 1307.60 -1.80 -0.1% -22.0%
Gold 1364.04 55.00 4.2% -18.5%
US Copper 3.28 0.06 1.7% -10.2%
LME Copper 7184.00 109.00 1.5% -9.4%
Dollar 80.183 -0.953 -1.2% 4.5%
CRB 289.541 2.824 1.0% -1.9%
US corn 456.25 2.25 0.5% -34.7%
US soybeans 1347.75 5.25 0.4% -5.0%
US wheat 646.50 3.50 0.5% -16.9%
US Coffee 111.30 0.25 0.2% -22.6%
US Cocoa 2576.00 0.00 0.0% 15.2%
US Sugar 16.89 0.10 0.6% -13.4%
US silver 21.514 21.297 1.6% -28.8%
US platinum 1425.20 2.80 0.0% -7.4%
US palladium 701.45 -3.80 -0.5% -0.3%