* Silver rises more than 9 pct after Monday’s rout
* Oil prices recover from 7-week lows
* US dollar loses ground, down around 1 pct
(Updates prices, adds details and New York dateline)
By Jeanine Prezioso and Eric Onstad
NEW YORK/LONDON, Sept 27 (Reuters) - Commodities bounded higher along with global stocks markets on Tuesday on fresh hopes that European leaders would iron out the region’s debt problems.
Spot gold rallied 3 percent, snapping four consecutive sessions of losses as the weaker U.S. dollar helped battered commodities stage a comeback and U.S. crude oil prices rose nearly 5 percent.
“The market is beginning to get the feeling that finally European lawmakers are moving out of their paralysis,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
“Commodity prices are up across the board. There’s hopes a global recession can be avoided.”
The 19-commodity Reuters-Jefferies CRB index .CRB was up 2.6 percent on Tuesday afternoon, extending gains from Monday.
Euro zone officials said they were working to increase the size of the region’s bailout fund, but Spain poured cold water on talk the fund could grow to 2 trillion euros. [ID:nLDE78P01H] [ID:nL5E7KR0TO]
“The right noises by European policymakers did improve market confidence today but this is only short-term. The euro zone debt problem can’t be waved away anytime soon and it is still bearish in the longer term,” said China Futures Co analyst Yang Jun.
The dollar was down around 1 percent against a basket of currencies .DXY, making gold and other dollar-priced commodities cheaper for holders of other currencies. [USD/]
Shares of stocks on major global exchanges were headed for their largest gain in 16 months on Tuesday. [ID:nS1E78Q0H7]
For a 24-hour technical outlook on Brent:
For a 24-hour technical outlook on oil:
FACTBOX-Hurdles to changing euro rescue fund [ID:nLDE77O0OF]
For TAKE-A-LOOK on world economic outlook [ID:nS1E78F0K0]
Spot gold XAU= rallied as much as 3.1 percent to a high of $1,676.69 an ounce. It had dropped up to 7 percent on Monday to a 7-1/2-month low near $1,530. U.S. gold futures GCcv1 jumped more than 5 percent. [GOL/]
“I think gold’s bottomed out here,” said Credit Agricole analyst Robin Bhar in London.
“Longer term, have all the factors that were bullish for gold really been addressed? Currency debasement, economic imbalances, sovereign debt — the factors that were there last week are still here today.”
In other precious metals, silver, which slid as much as 16 percent to a 10-month low of $26.04 an ounce on Monday, rose more than 9 percent to a high of $33.48 an ounce.
Three-month copper on the London Metal Exchange CMCU3 surged more than 5 percent to $7,659 a tonne after having tumbled to a 14-month low on Monday on recession fears. [MET/L]
The metal is used in power and construction and has fallen more than 25 percent since hitting a record high of $10,190 in February.
In the event of a global recession, copper is the most “exposed” among the industrial metals, Deutsche Bank AG said in a report.
Tin prices were given a boost by smelters in Indonesia’s main tin-producing region of Bangka island planning to impose a full export ban on tin ingot from Oct. 1 until global prices recover. [ID:nS1E78P1CW]
Three-month tin CMSN3 jumped 6.8 percent, while tin premiums for delivery to Europe from the Kuala Lumpur market leapt to $1,180. [ID:nL3E7KR0SA]
U.S. crude CLc1 was up more than 4 percent and as of 12:06 p.m. EDT (1606 GMT) had hit a session high of $84.20 a barrel.
Brent futures LCOc1 rose up to 2.7 percent a barrel to $106.74, its biggest one-day gain since Sept. 7. [O/R]
Both markets have recovered after falling to seven-week lows and posting weekly losses of more than 7 percent last week.
“Clarity on the euro zone plan is still key, crude prices are swinging back and forth depending on what comments come out of Europe,” said Victor Say, an analyst with Informa Global Markets in Singapore.
U.S. wheat and corn futures rose nearly 2 percent, extending gains from previous sessions, supported by a weaker dollar and forecasts for tight supplies as drought affects wheat planting. [GRA/]
ICE cocoa futures CCc2 extended gains from a one-year low of $2,654 per tonne on Monday, fueled by a falling dollar and favorable weather reports for future West African crops.
Raw sugar and arabica coffee extended gains for a second day, consolidating after last week’s sell-off. [SOF/L]
Prices at 12:13 p.m. EDT (2037 GMT)
CHG CHG CHG US crude CLc1 83.79 3.55 4.4% -8.3% Brent crude LCOc1 106.43 2.49 2.4% 12.3% Natural gas NGc1 3.798 0.016 0.4% -13.8% #VALUE! Gold XAU= 1659.95 33.10 2.0% 16.9% US Copper HGU1 344.95 17.45 5.3% -22.4% LME Copper CMCU3 7598.00 332.00 4.6% -20.9% Dollar .DXY 77.579 -0.784 -1.0% -1.8% CRB .CRB 310.940 7.790 2.6% -6.6% US corn Cc1 658.25 10.25 1.6% 4.7% US soybeans Sc1 1265.25 5.50 0.4% -9.2% US wheat Wc1 660.50 12.25 1.9% -16.8% #VALUE! #VALUE! US Sugar SBV1 26.02 0.93 3.7% -19.0% US silver SIU1 31.765 1.838 6.1% 2.7% US platinum PLV1 1578.60 31.70 2.1% -11.2% US palladium PAU1 654.75 28.30 4.5% -18.5%
Additional reporting by Jane Lee and Manolo Serapio, Jr in Singapore, Amanda Cooper in London and Matthew Robinson, Gene Ramos and Barani Krishnan in New York; Editing by Bob Burgdorfer