4 Min Read
NEW YORK (Reuters) - Gold rose to an all-time high near $1,530 an ounce on Wednesday and oil also went up after the Federal Reserve vowed to keep U.S. interest rates low for an extended period, which sent the dollar tumbling.
Copper and most other industrial metals fell on worries that U.S. economic recovery could stall and that top buyer China could resort to more monetary tightening that could further weaken demand.
The spot price of gold reached $1,529.90 an ounce, its eighth record in nine sessions. The market spiked, extending morning gains, after Fed ended a two-day policy meeting by saying was in no rush to raise interest rates that have remained near zero to support economic growth.
Fed chairman Ben Bernanke later reiterated the central bank's stance in its first post-meeting news conference.
James Steel, who follows the gold market for HSBC in New York, said the statements "put the nail in the coffin" to any thoughts investors had of the Fed raising rates soon to control inflation -- its other responsibility.
"There will be no speed about reversing policy ... (which is) good for gold," said Steel, who is HSBC's precious metals analyst and senior vice-president.
Crude oil prices rose in choppy trading after government data showed declining U.S. gasoline stockpiles. The Fed's intention to keep rates low added to gains, analysts said.
The Fed also said the rise in energy and commodity prices, though adding to inflationary pressure, would be "transitory". Oil traders interpreted that as meaning the government would not do much to weaken oil prices in the interim.
U.S. crude oil for May delivery settled at $112.76 a barrel, gaining 55 cents. The session high of $113.40 was just below the 2011 peak at $113.48 hit on Monday.
In London, May Brent crude closed at $125.13 a barrel, up 99 cents, after hitting the day's high at $125.80, closing in on the year's high of $127.02 struck on April 11.
"The Fed is sticking to its policy, and, as a result, we have to expect recent trends in the dollar and commodities to remain intact," said John Kilduff, partner at hedge fund Again Capital in New York.
Benchmark copper on the London Metal Exchange closed down $224, or 2.2 percent, at $9,321 after stockpiles of the metal at warehouses monitored by the LME hit 10-month highs.
With the 3,400-tonne rise in LME copper inventories on Tuesday, stocks have risen in 13 of the last 15 sessions.
Data showing new orders for durable U.S. manufactured goods rose more than expected in March failed to offset the gloom of a market enduring one of its weakest seasonal demand periods, analysts said.
Copper fell about 1.7 percent on Tuesday following Monday's Easter holiday in many trading hubs. This week will be another short trading week for Britain, with some markets closed on Friday for the royal wedding and on Monday for May Day.
In New York, U.S. copper futures for May delivery on COMEX settled down 9.10 cents, or 2.1 percent, at $4.2280.
On the agricultural front, calls for rain needed to help the developing hard red winter wheat crop in Kansas pushed wheat futures down 4.2 percent, their biggest drop in two weeks.
Corn futures also fell sharply on expectations for dry weather west of the Mississippi River that will allow farmers there to renew delayed planting activities.
Wheat futures for May on the Chicago Board of Trade soft settled down 34-1/4 cents at $7.77 a bushel. Wheat prices closed below key support at their 100-day moving average.
CBOT's May corn was down 14 cents at $7.52-1/4 a bushel.
Prices at 4:24 p.m. EDT (2024 GMT)
Editing by Alden Bentley