Metal prices end week higher on European bailout

AP News
Posted: Oct 28, 2011 4:44 PM
Metal prices end week higher on European bailout

Metal prices ended the week sharply higher Friday on hopes that a new financial bailout plan in Europe will lead to an increase in global economic growth.

Copper for December delivery gained 1.4 cents Friday to settle at $3.706 a pound.

Copper is up 15.2 percent for week. Platinum is up 9 percent and palladium is up 7 percent for the week.

The rally began after European officials announced early Thursday that they agreed to a broad framework to shore up banks and heavily indebted nations there such as Greece. While many details of the plan have yet to be finalized, markets have jumped on news of the agreement. Many traders were worried that European leaders wouldn't be able to agree on a deal.

Traders think the European bailout will help contain that region's financial woes. If the plan works, it might boost economic growth and increase demand for raw materials. Industrial metals like copper, palladium and platinum are used to make everything from iPods to automobiles.

December palladium fell $1.55 Friday to close at $668.35 an ounce. January platinum gained $10.40 to finish at $1,651.80 an ounce.

Precious metal prices also rose. Traders are buying more gold and silver because they think the European bailout could increase inflation by pumping more money into the global economy. Gold and silver are seen as a good investment when currency values fall.

Gold for December delivery fell 50 cents to settle at $1,747.20 an ounce. December silver was up 17.6 cents to close at $35.288 an ounce. That left gold up nearly 7 percent for the week, and silver up almost 13 percent.

Crop prices were mixed and did not rally as much as metals did during the week. Crop prices did end the week higher because economic growth generally boosts demand for grain and crop-based fuels like ethanol.

December wheat rose 0.5 cents to finish at $6.445 per bushel. Wheat is up 2.4 percent for the week.

December corn rose 3.5 cents to end at $6.55 per bushel. Corn rose nearly 1 percent for the week. November soybeans fell 18 cents to finish at $12.26 a bushel. Soybeans gained 1.1 percent in the week.

Oil prices fell. Benchmark oil lost 64 cents to end at $93.32 per barrel on the New York Mercantile Exchange.

Heating oil fell 3.73 cents to finish at $3.0664 per gallon, gasoline futures dropped 6.11 cents to close at $2.6461 per gallon and natural gas gained 14.6 cents to close at $4.042 per 1,000 cubic feet.