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Commodities Rally to Highest in a Month Amid Recovery Signals

Jan. 3 (Bloomberg) -- Commodities rose to the highest in a month as economic indicators from the U.S., China and Germany allayed concern that the world will spin into a recession.

The Standard & Poor’s GSCI Index of 24 commodities advanced as much as 1.7 percent to 655.63, the most since Dec. 8. Manufacturing in the U.S. probably gained in December at the fastest pace in six months, economists said before the release of a report today. German unemployment retreated more than forecast in December while Chinese manufacturing data also signaled expansion in the world’s second-largest economy.

“The new year seems to be bringing fresh buying into oil and other markets, such as gold and silver” said Christopher Bellew, a senior broker in London at Jefferies Bach Ltd. “Commodities will not be held back by Europe as the economic recovery in the U.S. and growth in emerging markets is more important. Iran and Syria are another potential reason for oil to go higher.”

Crude oil for February delivery climbed as much as $2.88, or 2.9 percent, to $101.52 a barrel on the New York Mercantile Exchange.

Oil rose as the U.S. and its allies increased pressure on Iran to halt what they say may be a covert nuclear weapons program. Sanctions signed into law by President Barack Obama on Dec. 31 aim to deter dealings with the Iranian central bank. The European Union, which is considering a ban on the Gulf state’s crude, will be ready by Jan. 30 to decide whether to extend its embargo, Michael Mann, a spokesman for the EU, said yesterday.

Reciprocal Measures

Iran’s Deputy Navy Commander Rear Admiral Mahmoud Mousavi told Press TV that any effort to harm the country’s interests will lead to “reciprocal measures.”

Gasoline for January delivery rose as much as 3.02 cents, or 1.1 percent, to $2.7165 a gallon in New York, after advancing 9.5 percent last year.

Cash gold gained as much as 1.7 percent to $1,592.25 an ounce, the highest since Dec. 28. Copper futures for March delivery increased as much as 2.6 percent to $3.5245 a pound on the Comex in New York.

Cocoa futures for March delivery climbed as much as 3 percent to $2,172 a ton in New York.

Increasing demand for autos, gains in holiday sales and lean inventories may pave the way for further strength in the U.S. manufacturing sector.

The Institute for Supply Management’s factory index rose to 53.4 last month from 52.7 in November, according to the median projection of 63 economists surveyed by Bloomberg News. Fifty is the dividing line between growth and contraction. Construction spending increased for a fourth straight month in November, another report may show.

China’s purchasing managers’ index rose to 50.3 in December from 49 in November, the Beijing-based logistics federation said Jan. 1. A number above 50 indicates expansion.

Germany’s adjusted jobless rate dropped to 6.8 percent, the Nuremberg-based Federal Labor Agency said today, as exports of cars and machinery boomed and one of the mildest winters on record helped support jobs in construction.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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