Most commodities rallied for a second day Thursday on the latest signs that the U.S. economy is building momentum.
Investors were encouraged by an increase in orders for long-lasting manufactured goods. But a primary driver of the rally was the Federal Reserve's announcement Wednesday that it will keep interest rates near zero until 2014 to aid the economic recovery.
The policy is expected to cause the dollar to weaken against other currencies. Commodities are priced in dollars so a weaker dollar makes them cheaper for investors who use other currencies.
Metals, wheat, beans and most energy products rose. Natural gas fell 4.2 percent.
The Commerce Department said orders for products expected to last at least three years rose 3 percent in December. That could mean stronger demand for materials used to manufacture products, including copper, platinum and palladium.
In addition, the department said its index of leading economic indicators, a gauge of future economic activity, rose 0.4 percent last month, compared with a 0.2 percent increase in November.
However, the U.S. economy still faces challenges related to Europe's debt crisis and slower growth in Asia. The Federal Reserve expects the U.S. economic recovery to continue at a slow pace.
Country Hedging LLC analyst Sterling Smith said the central bank's policy will prompt investors to step up their search for ways to make profits because low-interest rates typically push bond yields lower. That should benefit commodities.
"It appears if we can avoid any major financial hiccups, we could be looking at a strong (commodities) market for throughout the balance of the year," he said.
In metals trading, gold for February delivery rose $26.60 to finish at $1,726.70 an ounce. April platinum increased $37.20 to end at $1,616.80 an ounce.
In March metals contracts, silver rose 62.2 cents to $33.743 an ounce, copper increased 7.2 cents to $3.9015 per pound and palladium ended up $1.10 at $694.45 an ounce.
Benchmark oil increased 30 cents to end at $99.70 per barrel on the New York Mercantile Exchange. Heating oil rose 3.42 cents to finish at $3.0446 per gallon, gasoline futures rose 1.34 cents to $2.8508 per gallon and natural gas fell 11.5 cents to $2.654 per 1,000 cubic feet.
In March agriculture contracts, wheat rose 12.25 cents to end at $6.535 per bushel, corn was unchanged at $6.345 per bushel and soybeans increased 9.25 cents to $12.2275 per bushel.