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Gold Futures Surge as Fed Announces QE3: Commodities at Close

The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 0.6 percent to settle at 687.22 at 3:59 p.m. New York time, led by precious metals.

The UBS Bloomberg CMCI gauge of 26 prices advanced 0.8 percent to 1,652.61.

PRECIOUS METALS

Gold topped $1,770 an ounce for the first time since February after the Federal Reserve announced a third round of round of quantitative easing to boost the U.S. economy and reduce unemployment.

The central bank said today that it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month. Gold jumped 3.1 percent last week amid speculation that the Fed would announce measures to stimulate economic growth, increasing demand for the metal as an inflation hedge.

On the Comex in New York, gold futures for December delivery rose 2.2 percent to $1,772.10, the biggest gain since June 29. Earlier, the price reached $1,775, the highest for a most-active contract since Feb. 29.

Silver futures for December delivery jumped 4.5 percent to $34.778 an ounce, the biggest gain since June 29. Earlier, the price reached $34.87, the highest since March 5.

On the New York Mercantile Exchange, platinum futures for October delivery increased 1.8 percent to $1,679.50 an ounce.

Palladium futures for December delivery gained 1.4 percent to $689 an ounce. The metal climbed for the ninth straight session, the longest rally since April 2004.

BASE METALS

Copper rallied after the Fed said it will buy mortgage securities and keep interest rates low to boost economic growth.

On the Comex, copper futures for December delivery climbed 0.5 percent to $3.71 a pound.

On the London Metal Exchange, copper for delivery in three months declined 0.3 percent to $8,075 a metric ton ($3.66 a pound). Tin also fell, while nickel, aluminum, zinc and lead gained.

CRUDE OIL

Crude oil advanced to a four-month high on the Fed announcement and concern that protests in the Middle East and North Africa may lead to supply disruptions.

On the Nymex, oil futures for October delivery rose 1.3 percent to $98.31 a barrel, the highest settlement since May 4.

Brent oil for October settlement increased 0.8 percent to $116.90 a barrel on the London-based ICE Futures Europe exchange, the highest level since May 2.

Statoil ASA bought a cargo of Russian Urals crude for delivery to Rotterdam at a smaller discount to Dated Brent than the previous trade. There were no bids or offers for North Sea Forties blend.

Iraq will increase its daily exports of Basrah Light grade from the Persian Gulf by 4.3 percent in the second half of September from two weeks earlier, a loading program obtained by Bloomberg News showed.

OIL PRODUCTS

Gasoline tumbled as consumption declined and refinery startups indicated fuel production will increase.

On the Nymex, gasoline futures for October delivery fell 1.3 percent to $2.9622 a gallon.

Heating-oil futures for October delivery slid 0.1 percent to $3.2113 a gallon

NATURAL GAS

Natural gas declined for the first time in four days after a government report showed that U.S. stockpiles rose more than forecast.

On the Nymex, gas futures for October delivery dropped 0.8 percent to $3.037 per million British thermal units.

U.K. gas for next-day delivery rose to the highest in four months as Gassco AS said planned maintenance in Norway will reduce supplies next week.

Gas rose 0.5 pence to 60.5 pence a therm at 4:53 p.m. London time. The October price climbed 0.6 percent to 60 pence a therm. That’s equivalent to $9.67 per million Btu. A therm is 100,000 Btu.

SOFT COMMODITIES

Arabica coffee rose to a seven-week high on speculation that dryness in some of Brazil’s growing areas may trim the crop’s potential next year.

On ICE Futures U.S. in New York, coffee for December delivery climbed 0.8 percent to $1.7885 a pound. Earlier, the commodity reached $1.813, the highest for a most-active contract since July 24.

Raw-sugar futures for March delivery gained 0.1 percent to 20.43 cents a pound.

Cocoa futures for December delivery slid 0.7 percent to $2,613 a ton.

Cotton futures for December delivery rose 0.3 percent to 73.53 cents a pound.

Orange-juice futures for November delivery climbed 2 percent to $1.293 a pound.

GRAINS, OILSEEDS

Wheat rose for the second straight day on speculation that importers will seek alternatives to grain supplied by Russia, where prices have risen because of a drought.

On the Chicago Board of Trade, wheat futures for December delivery climbed 1.3 percent to $9.02 a bushel. The price gained 2.1 percent in two days and is up 38 percent this year.

Corn futures for December delivery climbed 0.6 percent to $7.7375 a bushel.

Soybean futures for November delivery rose 0.1 percent to $17.4725 a bushel.

LIVESTOCK

Cattle dropped from the highest since February on concern that demand from meatpackers is slowing.

On the Chicago Mercantile Exchange, cattle futures for December delivery declined 0.3 percent to $1.3035 a pound after reaching $1.31325, the highest since Feb. 22.

Feeder-cattle futures for October settlement fell 0.2 percent to $1.47025 a pound.

Hog futures for December settlement rose less than 0.1 percent to 72.375 cents a pound.

To contact the reporter on this story: Thomas Galatola in New York at tgalatola@bloomberg.net

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

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