Commodities bounce back
Commodities have advanced to the highest this year as oil climbs on speculation the glut in the US will ease, while production cuts have spurred a rally in industrial metals.
The Bloomberg Commodity Index (BCOM) of 22 raw materials gained as much as 1.2% to 104.9545, the highest since December 31, and settled at 104.7285 this week in New York.
West Texas Intermediate crude rose above $60 a barrel for the first time this year, and copper entered a bull market after posting the longest rally since 2005.
Gold rose as higher energy prices fuelled speculation US in- flation will start to pick up.
Raw-material prices have rebounded about 9% since reaching a 12-year low in March on speculation that increased stimulus in China will help to buoy demand.
The BCOM gauge has still plunged more than 50% from its record in 2008, after a decade-long bull market spurred farmers, miners and oil drillers to ramp up supplies.
China’s central bank has already loosened monetary policy, and the manufacturing gauge published Monday that signalled contraction for April fuelled anticipation that more measures will come.
Copper for delivery in three months advanced 1.3% to $6 480 a metric ton on the London Metal Exchange, capping an eighth straight gain.
Glencore, the world’s third-biggest copper-mining company, said its output of the metal from Africa, Australia and South America slid 9% last quarter.
The Bloomberg Dollar Spot Index fell as much as 0.6% and has declined for four straight weeks, increasing the appeal of commodities as alternative investments. – Bloomberg