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Commodities Rally, Head for Biggest Weekly Advance Since 1975

Posted By admin On August 22, 2008 @ 3:00 am In Money Watch | Comments Disabled

Millie Munshi and Dave McCombs
Bloomberg [1]
Friday, Aug 22, 2008

Commodities headed for their biggest weekly gain in 33 years as oil traded near its highest for more than two weeks and a weakening dollar revived demand for raw materials as alternative assets.

The Reuters/Jefferies CRB Index of 19 commodities soared 3.7 percent to 405.92 in New York yesterday. A settlement at that level today would mark a 6.2 percent gain for the week, the most since July 1975. The dollar headed for its first weekly decline against the euro since July 11, while oil climbed past $121 a barrel after jumping more than $5 yesterday.

A rebound in the CRB and a resumption of the dollar’s decline may stall a rout in commodities that has sent the index down 14 percent from a record on July 3. Raw materials priced mostly in dollars often move in the opposite direction to the U.S. currency.

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“Speculators’ stomachs are nearly empty, so they have the appetite to buy more,” Bob Takai, general manager of financial services at Sumitomo Corp., said by phone in Tokyo. “Buyers for oil will emerge from here and the price is going to go up.”

Gold for immediate delivery was little changed at $835.99 an ounce, after advancing 2.9 percent yesterday. Every commodity on the CRB except hog futures moved higher yesterday. Nickel was up 8.2 percent, cocoa rose 6.8 percent and silver 5.2 percent.

Commodities are gaining on speculation demand will increase from China as the country resumes work at factories and infrastructure projects that were shut or slowed during the Olympics.


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URLs in this post:

[1] Bloomberg: http://www.bloomberg.com/apps/news?pid=20601087&sid=a8ufOfci.230&refer=home

[2] Oil Set for Biggest Weekly Drop Since 2004 as Commodities Slump: http://www.prisonplanet.com/oil-set-for-biggest-weekly-drop-since-2004-as-commodities-slump.html

[3] Hedge Funds Bought Gold in Biggest Rally Since 2011: Commodities: http://www.prisonplanet.com/hedge-funds-bought-gold-in-biggest-rally-since-2011-commodities.html

[4] Oil Heads for Biggest Weekly Drop Since 2004 Before Jobs Report: http://www.prisonplanet.com/oil-heads-for-biggest-weekly-drop-since-2004-before-jobs-report.html

[5] U.S. Stocks Advance in Biggest Election Day Rally Since 1984: http://www.prisonplanet.com/us-stocks-advance-in-biggest-election-day-rally-since-1984.html

[6] Gold Touches Record, Set for Third Weekly Gain: http://www.prisonplanet.com/gold-touches-record-set-for-third-weekly-gain.html

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