Commodities Jump Most in Month as Gold Tops $1,800, Energy Prices Rebound

Commodities gained the most in a month and gold topped $1,800 an ounce for the first time on speculation that low interest rates and growth in emerging nations will support demand for raw materials.

The Standard & Poor’s GSCI index of 24 commodities climbed 2.5 percent to close at 630.08 at 3:47 p.m. New York time, the biggest jump since July 7. Stocks slid and Treasuries rose for a third day amid concern the European sovereign debt crisis is worsening.

Commodities may outperform equities the rest of the year because of record demand and shortages, Barclays Capital said in a report yesterday. Gold has climbed 26 percent this year on signs that U.S. interest rates will remain low.

“Commodity markets remain supported by emerging markets and speculators who see that fundamentals remain supportive,” said Keith Flury, an analyst at Rabobank International in London.

The Federal Reserve yesterday pledged to keep its benchmark interest rate at a record low for two years to bolster the economy. Gold has than doubled since the Fed lowered rates to near zero percent at the end of 2008.

Gold futures for December delivery jumped $43.10, or 2.4 percent, to $1,784.30 an ounce on the Comex in New York. Earlier, the price reached a record $1,801.

Crude-oil futures for September delivery climbed $3.59, or 4.5 percent, to $82.89 a barrel on the New York Mercantile Exchange. Supplies fell the most this year, the Department of Energy reported.

‘Encourage Demand’

“The DOE numbers are great, and lower prices are only going to encourage demand over the next few weeks,” said Hamza Khan, an analyst with the Schork Group Inc., a consulting company in Villanova, Pennsylvania.

Concerns that the recovery in the global economy will falter may limit the commodity rally, according to Brenton Saunders, who helps to manage $1 billion at Sydney-based Taurus Funds Management Pty.

“We haven’t fixed any of the problems yet, and it’s hard to imagine that the uncertainties will go away any time soon,” Saunders said.

Wheat futures for December delivery gained 2.2 percent to $7.1925 a bushel on the Chicago Board of Trade.

To contact the reporter on this story: Tony C. Dreibus in London at tdreibus@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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