Publications
Partners
London - Brent crude oil and copper bounced on Friday, bolstered by a weaker dollar, gains on Wall Street and fresh austerity moves by Spain that helped dampen fears about Europe's debt crisis.
Lingering fears, however, that the US economy may slip into recession limited gains and left gold hovering slightly below an all-time peak.
Investors got a glimmer of good news when Spain unveiled measures that sought to strike a balance between cutting its deficit and stimulating anaemic economic growth.
That together with a rebound in US stocks helped bolster sentiment after a string of weak US economic data on Thursday sparked a broad sell-off of riskier assets.
The Reuters-Jefferies CRB , a global benchmark for commodities, rose 0.5% by 1415 GMT.
The index dropped 2.3% on Thursday, its biggest daily decline since August 8, when energy, metals and agricultural markets slumped in the aftermath of Standard & Poor's downgrade of the US triple-A credit rating.
Data on Thursday showed factory activity in the US Mid-Atlantic region fell to the lowest level since March 2009 when the world's top economy was in recession.
"Investors are really worried. Confidence is at its lowest ebb for some time and the more data disappoints, the more upside lies ahead for gold," analyst Edel Tully at UBS said in a note.
Gold peaks
Gloom from Thursday's data boosted investor appetite for gold which climbed more than 2% to an all-time peak of $1 877 an ounce, the ninth time it has hit a record this month.
As other commodity markets recovered, gold pulled back from its highs to around $1 845 an ounce, but was still on track to rise about 6% this week, its best showing since February 2009.
So far this month, gold has gained about 14%, its biggest since rising nearly 17% in September 1999.
Oil claws higher
Oil rebounded as US shares recovered and after Spain reassured jittery markets. US crude gained 0.7% to $82.92 a barrel, bouncing from a low for the day of $79.17.
Brent crude rebounded after hitting a session low of $105.06 a barrel, down nearly 2% from the previous session. At the lows, Brent had lost about 10% this month, the worst since a near 15% drop in May 2010.
Investors, however, were wary about the gains.
"This short-term downturn is not done yet. It could take WTI to as low as $75. The fundamental picture is not that bad but if the overall economy remains weak it is very hard to make a case for a bull run in oil," said Tony Nunan, a risk manager with Mitsubishi Corp in Japan.
London copper also moved higher as three-month futures up 1.1% to $8 870 a tonne, having lost more than 2% on Thursday.
The industrial metals complex was partly supported by supply threats in Latin America.
Workers at Chile's Collahuasi, the world's No. 3 copper mine, have threatened a one-day stoppage on September 2 if the company does not hire back workers fired after a previous disruption.
"Setting aside the weak macro environment, copper's fundamentals remain well-supported. Risks of short-term disputes and potential supply outages remain," ANZ said in a note.
Agricultural markets got a shot in the arm from the weaker dollar and short-covering ahead of the week-end.
Chicago wheat and corn futures were called to open 2 to 3 cents per bushel higher after corn dropped in Asian trading to a one week low.
"Grains have their own dynamics that'll kick into gear in the next week or so because there's not enough of it," said Greg Smith, managing director of Global Commodities. "I think now is a good time to be buying grains."
Sugar, coffee and cocoa futures joined other markets on the upside.
