Rally continues on hopes for global recovery

NEW YORK – Commodities rallied for a second straight day on Friday as investors pinned hopes on a global economic recovery, but oil ended a touch lower after another round of stunningly weak US unemployment numbers.

Gold prices fell about 1 percent as investors ventured into riskier assets. A stronger dollar also blunted gold’s appeal as an inflation hedge.
The Reuters-Jefferies CRB, a broad commodities index that tracks prices across 19 energy, metals, grains and soft markets, was up 1,2 per cent, extending Thursday’s rise of nearly four per cent.
Analysts attributed the rally to actions by the Group of 20 nations which agreed on a trillion-dollar deal to halt the worst recession the world had known since the Great Depression.
‘Commodity markets have been encouraged by the results of the G20 meeting … manufacturers might start to look at rebuilding the stocks they’ve been running down,’ said John Meyer, analyst at UK investment bank Fairfax.
Copper soared to five-month highs, hurdling above the US$2 a pound level in New York, as upbeat US macroeconomic data through the week boosted investor confidence and bolstered the longer-term outlook for the industrial metal.
Copper for May delivery on the COMEX metals division of the New York Mercantile Exchange surged 11,05 cents, or 5,8 per cent. It was the highest close for a benchmark COMEX copper contract since October 29 2008.
On the London Metal Exchange, copper for three month delivery touched US$4 396 a ton, its highest level since November 4, before closing up US$140 at US$4 310 a ton.
Aside from a worsening labour market, US macroeconomic data was relatively benign last week, showing a 2,1 percent rise in pending sales of existing homes and a thinner-than-expected decline in construction spending.
Investor optimism also grew from a slower rate of contraction in March manufacturing activity and a 1,8 per cent rebound in February factory goods orders.
Agricultural markets were another strong performer, with wheat, corn and soybeans ending up to two per cent higher.
Soybeans, particularly, have had a bullish week, rising two percent on Friday and nearly nine per cent on the week, after aggressive US soy export sale numbers and a plantings report that boosted the outlook for the oil seed.
Among soft commodities, cocoa was the outperformer, hitting 8-week highs on heavy technical and fund buying.
Cocoa for July delivery ended New York trade up US$90, or 3,3 per cent, at US$2 790 per ton. It was the loftiest finish for a second month position in US cocoa since February 9.
London’s July cocoa closed up 23 pounds at 1 940 pounds per ton, the highest settlement since February 6.
US crude oil settled down 13 cents at US$52,51 a barrel after data showed that US employers slashed 663 000 jobs in March, lifting the unemployment rate to 8,5 percent, the highest since 1983.
In gold, the benchmark futures contract for June ended New York trade down US$11,60, or 1,3 per cent, at US$897,30 an ounce.
-Nampa-Reuters