Commodities pull back as dollar gains ground

Commodities pull back as dollar gains ground
NEW YORK — A slightly stronger dollar tugged on commodities Tuesday, causing prices for copper and oil to retreat after hitting their highest points in a year.
December copper futures fell 3.45 cents to settle at $2.9320 a pound on the New York Mercantile Exchange, after earlier rising to a 13-month high of $2.9990. Oil prices briefly topped $80 a barrel for the first time in a year before pulling back as the dollar gained ground against other major currencies. Light, sweet crude closed down 52 cents to $79.09 a barrel.
Gold also came off its highs of the session. The December contract tacked on 50 cents to settle at $1,058.60 an ounce after earlier nearing its record high of $1,072 an ounce.
The dollar recovered from an early fall and moved higher Tuesday after weak economic data overshadowed better-than-expected earnings reports from companies like Apple Inc. and Caterpillar Inc. Commodities generally move inversely with the dollar, since a stronger dollar makes them more expensive for foreign buyers.
Among the disappointing data Tuesday was a government report showing a sharp drop in applications for home building permits.
Also weighing on commodities was more evidence that inflation remains in check. The Labor Department said its producer price index fell 0.6 percent last month due to lower energy costs. Economists were expecting a flat reading after a steep rise in August.
The PPI tracks the prices of goods before they reach store shelves and is considered an early read on price trends.
The dollar has weakened considerably since March due to record low interest rates and massive amounts of government spending designed to boost the economy. That has led investors to search for higher returns outside the U.S. currency such as stocks and commodities. Despite the gains in the dollar on Tuesday, analysts generally expect the dollar to continue to fall in the coming months, which should help drive commodities prices higher.
In other Nymex trading, December silver fell 6.7 cents to $17.5580 an ounce, while October platinum lost $8.10 to $1,350 an ounce.
Gasoline futures were roughly flat at $1.9877 a gallon, while heating oil futures fell nearly half a cent to $2.0473 a gallon.
On the Chicago Board of Trade, November soybeans dropped 13.75 cents to $9.8250 a bushel.
December wheat futures fell a quarter cent to $5.1750 a bushel, while December corn fell 1.75 cents to $3.8450 a bushel.
Among other soft commodities, December cocoa prices rose $28 to $3,333 a ton after rising to a fresh contract high of $3,345 earlier in the session.
March sugar slipped 0.58 cent to 23.59 cents a pound. Coffee prices also fell.

Copyright © 2009 The Associated Press. All rights reserved.
The Master Blog


    Leave a Reply

    Fill in your details below or click an icon to log in: Logo

    You are commenting using your account. Log Out /  Change )

    Google+ photo

    You are commenting using your Google+ account. Log Out /  Change )

    Twitter picture

    You are commenting using your Twitter account. Log Out /  Change )

    Facebook photo

    You are commenting using your Facebook account. Log Out /  Change )


    Connecting to %s

%d bloggers like this: