A sharp drop in the dollar pushed prices for gold, oil and other commodities higher Wednesday.
A new report showing a sharp falloff in new home sales last month sapped investors' optimism about the economy, driving the dollar lower after four days of gains.
The Commerce Department says sales of new homes plunged 11.3 percent in November to their lowest level since March, a reminder that the recovery will be slow. That means that interest rates will likely remain low for some time, which will keep the dollar in check.
The ICE Futures U.S. dollar index, which measures the dollar against other currencies, tumbled 0.5 percent following the report. As the dollar retreated, gold gained $7.30 to $1,094 an ounce on the New York Mercantile Exchange.
Commodities have traded inversely with the dollar for much of this year, and the trend was firmly in place on Wednesday. Commodities become cheaper for foreign buyers when the dollar falls. Gold also benefits as a hedge against a weak greenback.
Record-low interest rates have sent the dollar falling since March. But in recent weeks investors have been buying dollars on the belief that the Federal Reserve might be forced to raise interest rates sooner than expected as the economy improves. That has put pressure on commodities prices.
The housing report was a reminder that the economic recovery will like be slow, keeping short-term interest rates about where they are now, near zero.
Other metals followed gold higher Wednesday. March silver jumped 16 cents to $17.19 an ounce, while March copper futures added 6.55 cents to $3.2035 a pound.
January platinum rallied $29.90 to $1,426.80 an ounce. Palladium also rose.
Oil prices soared more than 3 percent, boosted by the weaker dollar and a government report showing a drop in last week's crude supplies.
The government said crude in storage fell by 5 million barrels, more than twice what was expected. At the same time, the amount of crude being imported into the U.S. is down 17 percent from year-ago levels.
Light, sweet crude for February delivery jumped $2.27 to $76.67 a barrel.
Elsewhere on the Nymex, gasoline futures rose 7.78 cents to $1.9666 a gallon, while heating oil futures rose 6.32 cents to $2.0118 a gallon.
On the Chicago Board of Trade, March wheat futures rose 6 cents to $5.29 a bushel. March corn also rose 6 cents to $4.0475 a bushel.
March soybeans gained 10.5 cents to $10.09 a bushel.
Among other soft commodities, March cocoa futures fell $14 to $3,251 a ton, while coffee for March delivery added 0.2 cent to $1.4265 a pound.