By SANDY SHOREAP Business Writer
Commodity prices rose broadly Monday amid hints of progress in U.S. budget negotiations and in solving Greece's debt problems.
The gains were spread wide. Gold, copper, oil and sugar ending higher. Orange juice, cotton and natural gas fell.
Investors were encouraged after President Barack Obama and congressional leaders held talks Friday about ways to avoid tax increases and mandatory government spending cuts set to take effect Jan. 1. Without a compromise, economists say, the U.S. could eventually drop into a recession.
The negotiations appeared to ease fears among investors who have been cautious about putting money into riskier assets like commodities because of the uncertainty about where the U.S. economy was headed.
If the U.S. and global economies improve, it could mean more demand for such materials as oil, copper and agricultural crops.
Separately, the Greek government presented emergency legislation aimed at landing the country's next bailout payment. It's an indication that Greece is hoping to remain in the European Union, said Matt Zeman, an analyst with Kingsview Financial.
"In the markets, that's a sign of relief, I think," he said.
Commodities also benefited from a weaker dollar. Because commodities are priced in dollars, a weaker dollar makes them cheaper for traders who use other currencies.
Trading was light across the board ahead of the Thanksgiving weekend. That tends to make price swings more exaggerated, particularly in the smaller commodity markets.
Sugar rose 0.79 cent, or 4.1 percent, to finish at 19.94 cents per pound. Although rain caused some problems for the Brazilian sugar cane harvest, investors appeared to be more influenced by the encouraging economic signals, analysts said. Global sugar inventories remain plentiful.
In metals trading for December delivery, gold gained $19.70 to finish at $1,734.40 an ounce, silver rose 81.9 cents to $33.189 per ounce, copper rose 7.6 cents to $3.5275 per ounce, and palladium gained $18.85 to $645.30 per ounce. January platinum increased $22 to end at $1,583.80 per ounce.
Oil prices rose 2.7 percent on concerns about supply disruptions in the Middle East lingered as Israel escalated its bombing campaign.
Benchmark oil ended up $2.36 at $89.28 per barrel. Heating oil gained 8.83 cents to $3.0751 per gallon, gasoline futures rose 4.44 cents to $2.7545 per gallon and natural gas fell 7.1 cents to $3.719 per 1,000 cubic feet.
In other agricultural crop contracts, December wheat increased 3.75 cents to finish at $8.4175 per bushel, December corn rose 11.75 cents to $7.3875 per bushel, and January soybeans gained 11.5 cents to $13.9475 per bushel.
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