Commodities prices climb on Bernanke comments
Most commodity prices rose Monday after Federal Reserve Chairman Ben Bernanke affirmed support of the bank's policies. That led traders to believe the Fed will keep short-term interest rates low through 2014 as originally planned.
Bernanke told a group of economists during a speech in Arlington, Va., that the U.S. job market was still weak even after three months of strong hiring. He said the Fed's policies will help stimulate economic growth but the policymakers need to remain cautious in deciding their next moves.
The dollar weakened following Bernanke's comments. Since commodities are priced in dollars, a weaker dollar makes them more of a bargain for traders who use other currencies such as the euro and the Japanese yen.
There have been recent signs that the U.S. economy has been improving in other ways besides job growth. Consumer confidence in February was the highest it has been in a year and applications for unemployment benefits have declined.
That led some investors to question whether the Fed would increase interest rates sooner than expected, but Bernanke's remarks eased those worries, Kingsview Financial analyst Matt Zeman said.
Gold for April delivery increased $23.20 to finish at $1,685.60 an ounce and May silver rose 47.8 cents to $32.75 per ounce. May copper rose 7.9 cents to end at $3.8875 per pound, April platinum increased $18.80 to $1,646.70 per ounce and June palladium ended up $8.85 at $668.75 per ounce.
In other trading, wheat prices rose on reports that weather may cause problems for the winter wheat crop in northern France as it emergences from dormancy, said Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC.
That could raise questions about future grain supplies in the region.
In May contracts, wheat increased 5.25 cents to end at $6.595 per bushel, corn fell 8.75 cents to $6.3775 per bushel and soybeans ended up 13.75 cents at $13.795 per bushel.
Benchmark crude increased 16 cents to finish at $107.03 per barrel on the New York Mercantile Exchange. Heating oil rose 1.87 cents to $3.2288 per gallon, gasoline futures increased 3.14 cents to $3.4166 per gallon and natural gas fell 4.9 cents to $2.226 per 1,000 cubic feet.
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AP Economics Writer Martin Crutsinger contributed to this report.
