July 17, 2014 / 6:46 PM / in 4 years

COMMODITIES-Gold, oil, palladium up after Malaysia jet crash in Ukraine

* Gold posts largest one-day pct gain in a month

* US crude up 2 pct on stockpile drop, Russia tensions

* Palladium at 13-1/2 year highs, wheat up 2.5 pct

By Barani Krishnan

NEW YORK, July 17 (Reuters) - Gold prices jumped their most in a month on Thursday on geopolitical worries after a Malaysian jetliner crashed in eastern Ukraine, while other key commodities rose, too, on an improved demand outlook versus supply.

U.S. crude oil jumped 2 percent and Brent crude neared a one-week high after a sharp drop in U.S. oil stockpiles in the world’s top oil consumer. Tougher U.S. sanctions on Russia also pushed oil and platinum prices higher.

U.S. wheat futures surged nearly 3 percent, rallying from a four-year low, on fears of escalating tensions in the Black Sea region after the crash on Thursday of a Malaysian airplane, which was en route from Amsterdam to Kuala Lumpur. The jet crashed in a field in eastern Ukraine, killing all 295 people on board.

A Ukrainian interior ministry official told Interfax that pro-Russian militants had shot down the plane.

While some raw materials such as copper, natural gas and raw sugar saw price drops on weaker demand, the rally in the others appeared to shore up investor sentiment toward commodities after a recent selloff in gold and oil.

The 19-commodity Thomson Reuters/Core Commodity CRB Index climbed 0.3 percent, on track to a second positive day and rebounding from a five-month low earlier this week.

“The environment for macro investors is still extremely fraught with geopopolitical tensions and commodities that provide an insurance against that sort of risk - i.e. oil and gold - come into play when the fear factor goes up,” said Adam Sarhan of New York-based financial advisory Sarhan Capital.

Gold’s spot price was at $1,317.91 an ounce, up 1.4 percent, for its largest percentage gain in a month, as investors closely monitored reports of the Malaysian airline crash.

“When the (plane crash) news came out, it was frantic buying and short covering in the (gold) market,” said Phillip Streible, senior commodities broker at RJ O‘Brien in Chicago.

U.S. crude rose $1.90, or 2 percent, to $103.10 per barrel. Brent gained 0.6 percent to $107.80.

European gas and coal prices also jumped.

Platinum group metals (PGMs) also trended higher among precious metals after Washington’s move to impose sanctions on some of Russia’s biggest firms for failure to curb violence in Ukraine. PGMs are chiefly sourced from Russia.

Spot palladium hit a 13-1/2 year high at $887.90 an ounce and was last up 1.1 percent at $881.20. It’s the best performing precious metals for the year, up 24 percent so far.

Spot platinum was also up 1.1 percent at $1,495.60.

In wheat, the front-month September contract was up 2.5 percent at above $5.50 per bushel, rallying from a session low of $5.30-3/4 before news of the plane crash.

Ukraine and Russia are both major global wheat suppliers. (Editing by Bernadette Baum)

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