Commodities Rise Most in Two Weeks Amid Speculation China May Ease Policy
Commodities rose the most in two weeks amid speculation that China may ease monetary policy, boosting prospects for raw-material demand, after its economy expanded at the slowest pace in more than two years.
The Standard & Poor’s GSCI Spot Index (SPGSCI) of 24 raw materials climbed 1.2 percent to settle at 659.56 at 3:43 p.m. New York time, the biggest gain since Jan. 3. A gauge of industrial metals rose to an 11-week high, leading the rally.
Commodities have advanced 15 percent from a 10-month low on Oct. 4. Copper, crude oil and gold may rally this year as economic growth in China and the U.S. counter the impact of a European recession, Goldman Sachs Group Inc. said last week.
“More and more market players believe that China will implement further monetary-easing measures,” Eugen Weinberg, the head of commodity research at Commerzbank AG in Frankfurt, said today in a report. “This is giving considerable buoyancy to metal prices.”
China’s economy expanded 8.9 percent in the fourth quarter from a year earlier. The expansion was the slowest in 10 quarters, spurring speculation that the government will ease lending curbs and boost spending. China is the world’s top buyer of copper and the second-biggest oil consumer.
An index of copper, aluminum, lead, zinc, nickel and tin on the London Metal Exchange rose to the highest since Oct. 28.
Metals, Oil
Copper futures for March delivery gained 2.5 percent to close at $3.7295 a pound on the Comex in New York. Earlier, the price reached $3.759, the highest for a most-active contract since Sept. 21.
On the LME, lead jumped 3.8 percent, the most since Nov. 30 and the biggest increase among components in the GSCI index. Aluminum advanced 3 percent on the LME.
On the New York Mercantile Exchange, oil rose the most in two weeks as German investor confidence jumped by a record and France pushed for faster enforcement of the European Union’s proposed ban on petroleum imports from Iran.
Gold futures climbed to a five-week high as the dollar’s drop spurred demand for precious metals as alternative assets. Silver also climbed.
Soybean and corn futures increased for the first time in a week in Chicago, partly on concern that drought in South America will reduce global supplies.
U.S. natural gas closed at the lowest price in almost 10 years as above-normal temperatures and rising production contributed to a growing surplus of the furnace and power-plant fuel.
Exchanges in the U.S. were closed yesterday for a public holiday.
To contact the reporter on this story: Jake Rudnitsky in Moscow at jrudnitsky@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
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