U.S. Commodities: Gold Surges to Record on Euro, Dollar Concern

Gold futures jumped to a record $1,429.40 an ounce on concern the U.S. will pump more cash into the economy and Europe’s debt woes will spread, boosting the appeal of the metal as an alternative to currencies.

Federal Reserve Chairman Ben S. Bernanke said the central bank may boost Treasury purchases. European officials were split on containing the sovereign-debt crisis. Gold priced in euros and U.K. pounds also rose to records, and silver futures extended a rally to a 30-year high.

“Fundamentals are very much bullish for gold,” said Frank Lesh, a trader at Futurepath Trading in Chicago. “The continuing European debt crisis is on traders’ mind, and that creates the flight-to-safety quality in gold.”

In other markets, wheat rose to a four-month high as rain drenched fields in Australia, delaying the harvest and raising speculation that crop quality will decline. Orange-juice prices jumped. The UBS Bloomberg Constant Maturity Commodity Index was little changed at 1,563.32.

Gold futures for February delivery reached the all-time high in after-hours trading after closing up $9.90, or 0.7 percent, to $1,416.10 at 2:14 p.m. on the Comex in New York. The previous intraday record was $1,424.30 on Nov. 9.

Gold for immediately delivery traded at $1,423.75 at 5:16 p.m. New York time. Earlier, the metal reached a record $1,427.55.

The metal is in “unchartered territory” after breaking the record, Lesh said. Prices may reach $1,456 or higher by the end of the year, he said.

Wheat

Wheat futures for March delivery climbed 14 cents, or 1.8 percent, to settle at $7.93 a bushel on the Chicago Board of Trade. Earlier, the grain reached $7.9875, the highest since Aug. 6. Last week, the price surged 13 percent, the most since early August.

Rains today through Dec. 8 in eastern Australia may total more than 1 inch (2.5 centimeters), disrupting fieldwork, according to AccuWeather Inc. Floods and heavy moisture may reduce the quality of more than 40 percent of the country’s crop, the National Australia Bank Ltd. estimates. Australia was expected to be the fourth-largest exporter this year, after drought reduced output in Russia.

“Everybody counts on Australia’s harvest this time of year, and if that starts to diminish, it looks to me that the U.S. is the only place people can go,” said Tomm Pfitzenmaier, a partner at Summit Commodity Brokerage in Des Moines, Iowa. “We’ve got plenty of wheat to sell.”

Orange Juice

Orange-juice futures rose to the highest since May 2007 on concern that freezing weather may harm groves in Florida, the world’s second-biggest grower.

Temperatures in parts of central Florida, the state’s largest growing region, may fall to 29 degrees Fahrenheit (minus 2 Celsius) tomorrow morning, said David Salmon, a meteorologist at Weather Derivatives in Belton, Missouri. Temperatures would need to touch 25 degrees to “start doing some damage to the fruit,” he said. Orange-juice prices jumped 10 percent in four sessions.

“It’s all weather-related concerns,” said Jodi Timmons, a vice president at Global Commodity Futures LLC in Fort Lauderdale, Florida. “We have some pretty cold temperatures forecast for the later part of this week.”

Orange juice for January delivery rose 7.65 cents, or 4.9 percent, to settle at $1.6445 a pound on ICE Futures U.S. in New York, the biggest gain since Oct. 15. Earlier, the price reached $1.667, the highest since May 21, 2007.

Commodities settled as follows:

Precious metals: February gold up $9.90 to $1,416.10 an ounce March silver up 46.4 cents to $29.735 an ounce January platinum down $14.90 to $1,713.60 an ounce March palladium down $18.70 to $751.40 an ounce

Livestock: February live cattle up 0.05 cent to $1.06425 a pound January feeder cattle down 0.175 cent to $1.185 a pound February lean hogs down 1.325 cents to 75.25 cents a pound February pork bellies unchanged at $1.045 a pound

Grains: January soybeans down 11.75 cents to $12.885 a bushel March corn down 5.5 cents to $5.68 a bushel March wheat up 14 cents to $7.93 a bushel March oats up 5 cents to $3.72 a bushel

Food and Fiber: March coffee up 4.15 cents to $2.0895 a pound March cocoa up $130 to $3,065 a metric ton March cotton down 1.91 cents to $1.3043 a pound March sugar down 0.49 cent to 29.01 cents a pound January orange juice up 7.65 cents to $1.6445 a pound

Energy: January crude oil up 19 cents to $89.38 a barrel January natural gas up 13.9 cents to $4.488 per million British thermal units January heating oil down 1.17 cents to $2.4757 a gallon January gasoline down 1.04 cents to $2.3417 a gallon

Others: March copper up 0.9 cent to $4.008 a pound March lumber down $1 to $264 per 1,000 board feet

To contact the reporters on this story: Yi Tian in New York at Ytian8@bloomberg.net; Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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