Metals and grains gained back some of their losses from last week's massive sell-off, as investors bet that commodity prices have fallen too low.
Many analysts, still feeling the unsettled after last week's plunge in commodity prices, said the gains could be temporary. Prices for gold, silver, oil and grains have surged this year as investors poured their money into hard assets over fears of inflation. But that investment theory appeared to fail last week as traders grew more pessimistic about economic growth, and became more concerned that demand would drop for metals and crops now that some prices are at or near all-time highs.
As economic reports cast doubt on the strength of the U.S. economic recovery, prices for commodities like soybeans and copper started to fall. Speculators then increased the sell-off, exaggerating the price swings, as they sought to back out of their bets that prices would rise.
Monday's small rally might just be a blip in a broader decline, said Jon Nadler, senior analyst with Kitco Metals Inc.
"Yes, there will be rebounds; they are inevitable. But something has changed. There is a sense of `something is indeed different' here," Nadler wrote in a report to clients Monday.
"Time and again, I cannot help but revisit that certain piece from the Russian Academy of Sciences. You know, the one that posited the theory that the great commodity bubble might start leaking air circa April to June," Nadler wrote.
Still, many investors seemed eager to snap up contracts for gold, oil and industrial metals that are a bargain compared to just a few weeks ago.
Gold for June delivery added $11.60 to settle at $1,503.20 an ounce. July silver rose $1.829 to settle at $37.116 an ounce.
July copper rose 4.1 cents to settle at $4.0165 a pound. July platinum rose $8.70 to settle at $1,795.10 an ounce and June palladium gained $12.70 to settle at $729 an ounce.
July agriculture contracts rose, with wheat gaining 31 cents to settle at $7.905 per bushel, corn rising 21.25 cents to settle at $7.0750 a bushel and soybeans adding 9 cents to settle at $13.35 per bushel.
Oil also rose, even though the dollar remained flat, suggesting investors felt that oil had fallen too far last week.
Monday's jump in oil prices, though, may be what analysts refer to as a "dead cat bounce." That's a temporary rise in price that interrupts a generally downward trend.
Some analysts believe that the price of oil will continue to decline because high gasoline prices are cutting into demand for oil. Also, the U.S. economy is not growing as fast as had been predicted. U.S. gross domestic product growth slowed to 1.8 percent in the first quarter.
"We expect oil to fall further as the global economy slows, the dollar continues to rebound, and the risk premium due to unrest in the Middle East eventually fades," Capital Economics said in a report.
Benchmark crude for May delivery rose $5.37, or 5.5 percent, to $102.55 per barrel on the New York Mercantile Exchange.
In other Nymex trading for May contracts, heating oil gained 11.61 cents to settle at $2.9618 per gallon, gasoline futures rose 18.83 cents to settle at $3.2784 per gallon and natural gas for June delivery lost 8.1 cents to settle at $4.216 per 1,000 cubic feet.
AP Energy Writer Jonathan Fahey contributed to this report.