May 18, 2012 / 9:36 PM / 8 years ago

COMMODITIES-Wheat, gold make stunning runs in nervous markets

* Wheat posts largest weekly gain since 1996
    * Gold finishes week with sharp 2-day rally
    * Oil and copper down about 4 pct each on week
    * Traders, investors remain jittery about eurozone prospects

 (Updates with markets' close)	
    By Barani Krishnan	
    NEW YORK, May 18 (Reuters) - Wheat charged higher on Friday
to post its biggest weekly gain in 16 years and gold continued
its recovery from four-month lows as commodity markets saw
selective buying amid lingering worries about the euro zone.	
    Prices of crude oil and copper -- two of the biggest
industrial commodities -- remained weak amid uncertainties posed
by fresh elections looming in Greece and a cut in the credit
ratings of 16 Spanish banks by Moody's.
  	
    Leaders of major industrial economies meet this weekend to
try to head off a full-blown crisis in Europe where fears are
growing that Greece could leave the euro zone bloc, threatening
the future of the common currency. 	
    "Given how critical the situation is in Europe at present,
policy makers may well feel the need to come up with something
to soothe the markets and the possibility of that might lead to
some book squaring ahead of the weekend," Fastmarkets said in a
note.  	
    Worries about a slowing economy in China -- the world's
largest metals importer and a giant consumer of many other raw
materials -- further clouded the demand outlook for commodities,
analysts said.	
    Oil and copper prices fell 4 percent on the week.	
    The front-month contract for U.S. crude oil fell
$1.08 to settle at $91.48, less than $2 above its $90 per barrel
support. Brent July crude in London eased 35 cents to
settle at $107.14 a barrel, about $2 above its $105 support. 
 	
    Copper futures in London had their biggest weekly
decline since December, settling below the $8,000 a tonne level
critical for the confidence of market bulls. 	
    While many expected copper prices to test new lows in coming
days, some braced for the odd rebound that could surprise.	
    "Next week is a tough call, but my gut feeling is that we'll
see slightly higher prices because we've gone too far on the
downside," said Stephen Briggs, metals strategist for BNP
Paribas in London.  	
    The 19-commodity Thomson Reuters-Jefferies CRB index 
edged higher after the relative outperformance of wheat, gold
and a few other markets such as corn and cocoa.	
    On a weekly basis, however, the CRB closed down for a third
week, weighed down by the multi-month lows in oil and copper.	
    	
    WHEAT SIMMERS ON HEAT WAVE	
    U.S. wheat futures had their biggest since 1996 as hot and
dry weather kept fears simmering about crop losses in the U.S.
Plains and Russia.	
    "Wheat is a weather market right now," said Jack Scoville,
analyst for brokers TPFG in Chicago.	
    Crop experts said the promise of a bumper harvest for U.S.
hard red winter wheat was eroding by the hour as scorching
weather and high winds in important growing areas of the U.S.
Plains sapped soils of needed moisture. 	
    Benchmark wheat for July on the Chicago Board of Trade
settled at $6.95-1/4 a bushel, up 37-1/2 cents, or almost 6
percent for the day. 	
    For the week, wheat was up almost $1 a bushel, or 16
percent. Reuters data showed that was the biggest weekly gain
since 1996 for a front-month CBOT wheat contract on a spot
continuation basis.   	
    Gold jumped, posting its biggest weekly gain in a month.	
    The spot price of gold, which tracks trade in
bullion, hovered just above $1,590 an ounce, up $17 on the day.
After sinking this month during three-fourths of the trading
sessions and breaching various technical low points as investors
sold the precious metal to cover losses elsewhere, the market
popped up on Thursday by nearly $35.	
    Despite sharp declines from Monday through Wednesday, the
two-day rally put the spot price of gold up 0.8 percent for the
week -- its biggest weekly rise since mid-April.   	
 Prices at 5:20 p.m. EDT (2120 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    91.33    -1.08  -1.2%   -7.6%
 Brent crude                107.12    -0.37  -0.3%   -0.2%
 Natural gas                 2.742    0.148   5.7%   -8.3%
 
 US gold                   1591.90    17.00   1.1%    1.6%
 Gold                      1591.80    18.55   1.2%    1.8%
 US Copper                  346.85    -1.05  -0.3%    0.9%
                             
 Dollar                     81.088   -0.295  -0.4%    1.1%
 CRB                       290.430    0.880   0.3%   -4.9%
 
 US corn                    635.50    10.50   1.7%   -1.7%
 US soybeans               1405.00   -33.00  -2.3%   17.2%
 US wheat                   695.25    37.50   5.7%    6.5%
 
 US Coffee                  177.70    -0.95  -0.5%  -22.1%
 US Cocoa                  2273.00    49.00   2.2%    7.8%
 US Sugar                    20.47    -0.39  -1.9%  -11.9%
 
 US silver                  28.694    0.698   2.5%    2.8%
 US platinum               1459.30     5.90   0.4%    3.9%
 US palladium               603.60    -2.25  -0.4%   -8.0%
 	
 (Editing by Bob Burgdorfer and David Gregorio)
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