Commodities Reach 3-Month High in Best Weekly Run Since FebruaryGlenys Sim and Alessandro Vitelli
Commodities advanced to the highest level in more than three months and headed for a fourth weekly increase in the best run since February.
The Standard & Poor’s GSCI Index of 24 raw materials climbed as much as 0.3 percent to 652.85, the highest level since April 2, and was little changed at 10:54 a.m. in London. Gold for immediate delivery added 0.2 percent to $1,287.30 an ounce, while wheat in Chicago advanced 0.3 percent.
The gauge is up 1 percent this week in the best winning streak since the eight-week rally through Feb. 1. U.S. Federal Reserve Chairman Ben S. Bernanke said July 17 the central bank’s bond purchases “are by no means on a preset course” and could even be expanded if economic conditions warrant. The Bloomberg Dollar Index, which tracks the greenback against 10 currencies, is heading for a second weekly decline.
“Bernanke is very mindful of the fact that the recovery can falter quite easily,” said Dan Smith, a commodities analyst at Standard Chartered in London. “Things are going to remain quite volatile. As long as rates don’t go up too much and quantitative easing is eased back slowly, then I don’t see any reason why gold can’t go higher.”
The S&P GSCI has risen 0.7 percent this year as oil in New York jumped 18 percent and natural gas advanced 13 percent. West Texas Intermediate crude was little changed after climbing to a 16-month high yesterday as data showed the number of Americans who filed for jobless benefits dropped to the fewest since early May. Natural gas rose to a four-week high yesterday as U.S. stockpiles increased by less than forecast last week.
The spread between Brent and WTI crude narrowed by 10 percent to 80 cents a barrel at 11 a.m. on London’s ICE Futures Europe exchange. The differential shrank by 61 percent to 89 cents yesterday.