Commodities rose to the highest level in more than five months as the dollar declined after Federal Reserve Chairman Ben S. Bernanke said that the U.S. jobs market is far from healthy.
The Standard & Poor’s GSCI Index of 24 commodities gained 0.8 percent to 673.99 at 1:20 p.m. in New York, the highest level since Aug. 31.
Oil futures advanced as much as 2.3 percent after Bernanke’s comments sent the dollar to its lowest level against the euro since Dec. 12, making assets priced in the U.S. currency more attractive. Bernanke said in testimony prepared for the Senate Budget Committee that the U.S. has a long way to go before the jobs market operates “normally.” Gold, aluminum and copper also advanced.
“There’s general improvement in risk sentiment and strong weakness in the dollar,” said Nic Johnson, who helps manage about $30 billion in commodities at Pacific Investment Management Co. in Newport Beach, California. “Equities are higher, commodities are higher, so people are generally putting on risk.”
Oil for March delivery rose $1.47, or 1.5 percent, to $98.38 a barrel at 1:22 p.m. on the New York Mercantile Exchange after falling to $95.84 a barrel. Prices have slipped 0.5 percent this year.
“Bernanke made some pretty bearish statements and the dollar tanked,” said Stephen Schork, president of the Schork Group in Villanova, Pennsylvania. “Once the dollar dropped you saw WTI rebound.”
Gold climbed for the first time in three sessions as the dollar weakened, increasing demand for the precious metals as an alternative investment.
“The dollar’s decline is pushing gold higher,” Fain Shaffer, the president of Infinity Trading Corp. in Medford, Oregon, said in a telephone interview.
Gold futures for April delivery climbed 0.6 percent to $1,735.50 an ounce at 10:43 a.m. on the Comex in New York. Prices dropped 2 percent in the previous two sessions. Before today, the metal was up 10 percent in 2012.
Copper futures for March delivery rose 0.1 percent to $3.8695 a pound at 12:24 p.m. on the Comex. Earlier, the metal fell as much as 1.8 percent.
Aluminum rose $32, or 1.4 percent, to $2,255 a ton on the London Metal Exchange. Heating oil gained as much as 1.6 percent to $3.2208 a gallon in New York, the highest price since May 3.
“Over the past two and a half years, the U.S. economy has been gradually recovering from the recent deep recession,” Bernanke said today. “While conditions have certainly improved over this period, the pace of the recovery has been frustratingly slow, particularly from the perspective of the millions of workers who remain unemployed or underemployed.”