New York - Arabstoday
Gold, copper and corn prices rallied on Friday, sending commodities broadly higher, after data showing softer US economic growth in the first quarter raised the prospect of more stimulus from the Federal Reserve. The weaker-than-expected data on US gross domestic product pushed the dollar down despite pressure on the euro from a downgrade of Spain\'s credit rating. Dollar-denominated commodities, which comprise nearly all key raw materials, including oil, rose to adjust to the drop in the currency. The Thomson Reuters-Jefferies CRB index, which tracks 19 commodities all traded in the dollar, gained nearly 0.75 per cent on the day and 1.4 per cent for the week. Sugar bucked the trend, falling to a near one-year low in New York trading. Gold had its biggest weekly gain since late February, rising for a fourth consecutive day. \"The GDP data may confirm ongoing stimulatory US monetary policies, which is positive for gold,\" said James Steel, chief commodity analyst at HSBC. Commodity prices had risen previously when the Fed engaged in two rounds of asset purchases to stimulate the economy. The dollar has fallen since Wednesday, when Fed Chairman Ben Bernanke said the central bank had not ruled out further stimulus, which in the past has involved printing more money. The spot price of gold, which tracks trades in bullion, rose 0.4 per cent on the day and 1.2 per cent on the week to fetch above $1,662 an ounce. Traders said investors saw the precious metal as a hedge against the dollar amid speculation over US stimulus, and a safe-haven bet against further deterioration in Spanish and Eurozone finances. Copper, often regarded as an economic barometer, hit three-week highs. Stimulus expectations aside, copper was lifted by falling stockpiles of the commodity in warehouses linked to the London Metal Exchange. The LME\'s benchmark three-month copper contract peaked at $8,433 (Dh30,975) per tonne, its highest since April 4, before going untraded at the close, and was last bid at $8,415. It closed on Thursday at $8,322. Corn became the CRB\'s biggest gainer for the day, jumping five per cent to close at $6.53 a bushel on the Chicago Board of Trade. Its weekly gain of seven per cent was the biggest since May 2011. Export data showed runaway demand for US corn, including last week\'s largest one-day shipment to China in 21 years. Oil closed little changed on the day, weighing US stimulus prospects against the possibility of a global drop in demand for energy.