Industrial metals power higher along with market

AP News
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Posted: Mar 13, 2012 4:18 PM
Industrial metals power higher along with market

Major commodities like silver, copper and corn powered higher on Tuesday as the Federal Reserve offered a more positive view of the economy and the Commerce Department reported higher retail sales.

Silver rose 17 cents to $33.58 per ounce. Copper rose 6 cents to $3.90 per pound. Platinum rose $6.10 to $1,701.80 per ounce. Palladium rose $4.60 to $708.85 per ounce. The major stock indexes also ended the day higher, and the Nasdaq composite index crossed a crucial psychological threshold by closing above 3,000.

The outlier was gold, which fell $5.60 to $1,694.20 per ounce. But it's still up nearly 7 percent so far this year.

The rise in metals prices followed widespread declines on Monday, when China reported its highest trade deficit in a decade. China is a major consumer of copper and other industrial metals.

In a note to clients Tuesday, Barclays Capital analyst Gayle Berry wrote that China's copper imports in February were the second highest on record. But Berry also said China's high demand for refined copper didn't necessarily mean the metal is filtering down into the hands of the end users; rather, some of it is being used as a method to get access to credit, or is being hoarded in warehouses and exchanges.

Corn and soybeans rose while wheat fell. Corn rose 2.5 cents to $6.62 per bushel, and soybeans rose 14.3 cents to $13.488 per bushel. Wheat fell 2.2 cents to $6.49 per bushel.

Coffee rose 1.3 cents to $1.861 per pound, but that followed a long decline. Coffee has seen both a sharp increase and a sharp fall in the past two years, rising from about $1.38 per pound two years ago and then peaking at higher than $3 in May.

In a note to clients, Jack Scoville of Price Futures Group wrote that the lower coffee prices could allow some roasters to buy higher-quality beans.

Natural gas futures, which have been steadily declining this year because balmy weather has crimped demand, surged after the Fed said it expects the economy to expand moderately in the coming months. Natural gas rose 3 cents to finish $2.299 per 1,000 cubic feet in New York trading, after hitting a 10-year low of $2.269 on Monday.

Benchmark oil increased 37 cents to finish at $106.71 in New York. Gas is selling for an average of $3.81 per gallon in the U.S., up nearly 30 cents from a month ago. Some economists worry that the higher gas prices will derail the nascent U.S. recovery.