Metals up on Greece aid, China move to spur growth

AP News
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Posted: Feb 21, 2012 3:47 PM
Metals up on Greece aid, China move to spur growth

Metals prices jumped Tuesday on expectations that demand may improve after a new Greek bailout package was approved and China took another step to stimulate economic growth.

Silver finished up 3.7 percent, while prices for platinum, copper and palladium all rose 3 percent or more. Gold ended up 1.9 percent.

Investors have been concerned about the impact on commodities demand from Europe's financial problems and a possible economic slowdown in China, the world-second largest economy.

After months of back-and-forth negotiations, leaders of countries that use the euro approved a multi-billion dollar funding package Tuesday for Greece. The country likely would have defaulted on its debt next month without getting more bailout money. A default could have triggered another financial crisis and created more problems for the European economy.

Last weekend, China's central bank said it will lower the ratio of funds Chinese banks must hold as reserves. The policy change is designed to free up more money for lending as a way to promote economic growth. It was the second time in two months that China's central bank has cut reserve requirements. China is a huge importer of raw materials.

In March contracts, silver rose $1.213 to end at $34.429 per ounce, copper increased 12.85 cents to $3.8365 per pound and palladium ended up $22.65 at $710.75 per ounce.

April gold rose $32.60 to finish at $1,758.50 an ounce and April platinum increased $51 to $1,684.90 an ounce.

In other trading, oil rose on growing concerns about European supplies after Iran said that it would stop selling oil to Britain and France in retaliation for Europe's planned oil embargo, which is scheduled to begin this summer. The European Union buys about 18 percent of Iran's oil exports, though most of that comes from sales to Italy and Spain.

Benchmark oil increased $2.65 to finish at $106.25 per barrel on the New York Mercantile Exchange. Heating oil rose 5.04 cents to end at $3.2393 per gallon, gasoline futures rose 5.46 cents to $3.0702 per gallon and natural gas fell 5.8 cents to $2.626 per gallon.

In March agriculture contracts, wheat fell 11 cents to end at $6.33 per bushel, corn fell 12.25 cents to $6.295 per bushel and soybeans rose 3.5 cents to $12.71 per bushel.