Commodities Rally to Highest in More Than Six Months on Greece
Wednesday, 22 February 2012 | 00:00
Commodities advanced to the highest level in more than six months as euro-area finance ministers reached agreement on a second debt bailout package for Greece, boosting the euro and increasing demand for raw materials.
The Standard & Poor’s GSCI Spot Index of 24 commodities climbed as much as 1 percent to 695.54, the highest intraday level since Aug. 1, and was at 694.54 at 1:55 p.m. in Singapore. Crude-oil futures in New York traded near the highest price in nine months, and copper gained for a second day.
Greece won a rescue after governments in Europe wrung concessions from private investors and tapped into European Central Bank profits to shield the euro area from a precedent- setting default. Finance ministers awarded 130 billion euros ($173 billion) in aid, engineered the profits transfer and coaxed investor representatives into providing more debt relief.
“The market has been pricing in an agreement and this news will help extend the positive reaction,” Natalie Robertson, an analyst at Australia & New Zealand Banking Group Ltd., said today by phone from Melbourne. “We are probably not in the clear yet. The big question is whether the Greeks will be able to deliver the reform in time.”
Raw materials measured by the S&P GSCI index advanced 7.7 percent this year, helped by higher U.S. factory output and a jobless rate in January at the lowest in three years. The central bank of China, the largest metals and energy consumer, has also cut banks’ reserve requirements. Chinese Vice President Xi Jinping says that the global economy faces an “uphill struggle” as it seeks to recover from a financial crisis.
The euro climbed 0.5 percent to 105.97 yen, a three-month high, and rose 0.4 percent to $1.3294, the highest since Feb. 9, after earlier losing 0.4 percent.
West Texas Intermediate oil futures for March delivery advanced as much as 2.1 percent from Feb. 17 to $105.44 a barrel, the highest intraday price since May 5, 2011. There was no floor trading in the U.S. yesterday because of a holiday.
Three-month copper added 1.3 percent at $8,340 a metric ton in London. Spot gold rose 0.3 percent at $1,739.89 an ounce.
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