Commodities Gain to Six-Month High as Oil Rallies on Syrian Risk

Commodities advanced to the highest level in more than six months as escalating tension in Syria spurred a rally in oil on concern that supplies from the Middle East may be disrupted.

The Standard & Poor’s GSCI Spot Index rose as much as 1.6 percent to 673.4, the highest since Feb. 20, and was at 673.35 at 11:14 a.m. in Singapore. West Texas Intermediate rose as much as 2.4 percent, while Brent rallied 2.5 percent. The two oil benchmarks plus gold account for about 50 percent of the index.

The U.S., France and Britain stepped closer to a strike against Syria, laying the legal groundwork to justify military action and moving forces into place. Syria is suspected of launching an Aug. 21 chemical-weapons attack outside Damascus. A U.S.-led strike on Syria is likely within the next week, Societe Generale SA said in a report.

“The geopolitical risk premium increased sharply in oil and also supported gold markets,” analysts at Australia & New Zealand Banking Group Ltd. led by Melbourne-based Mark Pervan said in a report. “While the events in Syria have little impact on oil prices in isolation, the potential impacts flowing through to the rest of the region are high.”

Gold futures climbed 2.2 percent to $1,424 an ounce yesterday, the highest level for a most-active contract since May 15. Bullion for December delivery traded 0.2 percent lower at $1,416.90 today.

Corn, wheat and soybeans in Chicago advanced today as hot weather in the Midwest spurred concern that yields may decline. Copper futures on the Comex climbed for the fourth day in five.

To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net NI OIL NI MIDEAST NI CMDMARKET NI NRGMARKET NI METMARKET NI AGRMARKET NI PCSMARKET NI SYRIA NI EM NI ASIA NI CMD

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