Commodity prices rose across the board Tuesday on hopes that European leaders were preparing a plan to contain the region's debt crisis.
Greece's finance minister said that the country would receive the next round of money in time to avoid a default. German Chancellor Angela Merkel said her country will do whatever it can to help Greece regain investor confidence.
It remains to be seen how such a plan would be structured and whether it will be finalized. However the mere hint of progress on resolving the crisis was enough to encourage investors who have been worried that the crisis would hurt demand for commodities by slowing the global economy.
Gold, silver, copper and oil led commodities higher. Gasoline, natural gas, soybeans and wheat also rose. Prices for many of those contracts have fallen in the past month.
"Given the size of the sell-off that we had over the last few days, a bounce like today's is understandable," MF Global senior market strategist Phillip Streible said.
Commodities also benefited from a weaker dollar. Since commodities are priced in dollars, a weaker dollar makes them cheaper for investors who use other currencies.
Gold for December delivery rose $57.70, or 3.6 percent, to end at $1,652.50 an ounce.
Streible said he believes many investors bought gold as a protection against currency movements and because the price has fallen 9.7 percent this month. It is still up 16 percent for the year.
In other metals trading, December silver rose $1.56, or 5.2 percent, to end at $31.536 an ounce, December copper rose 15.65 cents, or 5.2 percent, to $3.4395 a pound, September platinum increased $27.10 to $1,574 an ounce and December palladium increased $22.55 to $649.95 an ounce.
Energy and agriculture products also finished higher.
Benchmark oil rose $4.21, or 5.2 percent, to end at $84.45 per barrel on the New York Mercantile Exchange. Heating oil rose 8.27 cents to end at $2.8857 per gallon, gasoline futures rose 10.76 cents to $2.636 per gallon and natural gas rose 3 cents to $3.875 per 1,000 cubic feet.
September wheat rose 10 cents to finish at $6.5825 per bushel, December corn rose 4.25 cents to $6.5225 per bushel and November soybeans rose 3.25 cents to $12.63 per bushel.