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CORRECTED-COMMODITIES-Gold jumps as Fed chief defends stimulus; oil slips
February 26, 2013 / 10:20 PM / in 5 years

CORRECTED-COMMODITIES-Gold jumps as Fed chief defends stimulus; oil slips

(Corrects 10th paragraph to show Monday's price gain for gold
was nearly 1 percent, not 4 percent)
    * Gold marks biggest advance in months for a second day
    * Copper rises too after upbeat U.S. housing data
    * Oil down again on worries over Italian vote
    * Corn has sharpest rally in 6 weeks; sugar, cocoa tumble

    By Barani Krishnan
    NEW YORK, Feb 26 (Reuters) - Gold's biggest rally in months
stretched into a second day on Tuesday after the U.S. Federal
Reserve chief defended the stimulus program that has stoked gold
buying on inflation worries, but oil fell on concern about
Italy's elections.
    Copper edged higher on Fed Chairman Ben Bernanke's
defense of the stimulus and on upbeat U.S. housing and consumer
confidence data. Copper is a key raw material in home
construction and demand for the base metal is often viewed as an
indicator of the real economy. 
    Crop prices ended mixed. Corn rose 1.7 percent for its
largest run-up in six weeks. Raw sugar hit 2-1/2 year
lows and cocoa tumbled as well.  
    Eleven of the 19 commodities on the Thomson
Reuters-Jefferies CRB index settled lower, forcing the
commodities bellwether to close down 0.2 percent despite the
gains in gold, copper and corn.
    Analysts said concerns over Italy's elections was one of the
main factors for the slide.
    Stunned political parties in Rome searched for a way forward
after an inconclusive election gave none of them a parliamentary
majority and threatened prolonged instability and a renewal of
the European financial crisis. 
    "We suspect that investors will be watching developments in
Italy for a few more days," Edward Meir, analyst at INTL FC
Stone, said in his daily note on commodities.
    "Watching all this unfold, one could conclude that we could
be imperiling the relative stability achieved in Europe over the
past year."
    Gold jumped 1.8 percent for its sharpest one-day gain since
Nov. 6. In Monday's session, it rose nearly 1 percent for its
biggest advance since Oct. 1.
    The rally has been welcome relief for gold bulls hit most of
this month by a selloff in the precious metal after comments by
top Fed officials that suggested the U.S. central bank could
reduce or halt its bond buying activity that has made
inflation-fearing investors to rush into gold.
    A solid stock market performance this month has also
prompted some investors to move money they had in gold into
    Bernanke, speaking before the U.S. Senate Banking Committee,
said Fed policymakers were cognizant of potential risks of a
loose U.S. monetary policy. But he said the risks did not seem
material for now.
    "We do not see the potential costs of the increased
risk-taking in some financial markets as outweighing the
benefits of promoting a stronger economic recovery and more
rapid job creation," he said.
    U.S. gold futures for April delivery settled up
$28.90, or 1.8 percent, at $1,615.50 an ounce. The spot price of
bullion hovered at above $1,613 by 4:40 p.m. ET (2140
GMT), up 1.3 percent on the day.
    In the energy markets, Brent crude hit a session low
of $112.41 a barrel, its weakest since Jan. 24, and settled down
$1.73 at $112.71.
    U.S. crude oil CLc1 was down 48 cents at $92.63 a barrel,
after touching a low of $91.92, a level not seen since Jan. 4.
    Brent had rallied to a nine-month high near $120 in early
February but fallen since on signs the global economy was still
fragile. Support for Brent fell for the first time since January
below the 50-day moving average, which is a key indicator of
market sentiment.
    Gasoline prices slipped as well. New York's benchmark RBOB
gasoline for March delivery settled down 2.7 percent, or
more than 7 cents a gallon, at $2.9816 a gallon.
 Prices at 4:56 p.m. EST (2155 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    92.71    -0.40  -0.4%    1.0%
 Brent crude                112.81    -1.63  -1.4%    1.5%
 Natural gas                 3.427    0.013   0.4%    2.3%
 US gold                   1615.20    29.00   1.8%   -3.6%
 Gold                      1613.61     0.50   0.0%   -3.6%
 US Copper                  356.65     2.35   0.7%   -2.4%
 LME Copper                7858.50    22.50   0.3%   -0.9%
 Dollar                     81.832    0.162   0.2%    6.6%
 US corn                    705.00    11.50   1.7%    1.0%
 US soybeans               1447.75    -3.50  -0.2%    2.0%
 US wheat                   705.75     6.50   0.9%   -9.3%
 US Coffee                  142.90     0.30   0.2%   -0.6%
 US Cocoa                  2126.00   -18.00  -0.8%   -4.9%
 US Sugar                    17.79    -0.22  -1.2%   -8.8%
 US silver                  29.260    0.273   0.9%   -3.2%
 US platinum               1616.50    -4.20  -0.3%    5.1%
 US palladium               739.40    -9.65  -1.3%    5.1%
 (Editing by David Gregorio)

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