Commodities prices climbed Wednesday, bolstered by a weak dollar and the resulting uptick in foreign demand for raw materials. Precious and industrial metals advanced, as did energy and agriculture futures, AP reported. Although a growing number of investors expect the Federal Reserve will not lower interest rates again this year _ taking some pressure off the currency _ expectations for sluggish U.S. growth sent the dollar lower. Commodities benefited from the greenback's slide as investors searched for more lucrative investments than the dollar. Meanwhile, foreign buyers, who see prices quoted in dollars as relatively cheap, hunted for bargains. Crude oil for November delivery rose $1.04 to close at $81.30 a barrel on the New York Mercantile Exchange. December gold gained $2.90 to settle at $746 an ounce on the Nymex, while silver futures picked up 8.5 cents to end at $13.668 an ounce. The market consensus has recently shifted away from predicting an interest rate cut, either at the Fed's Oct. 30-31 meeting or its meeting in December, as credit markets have loosened somewhat following a difficult summer and volatility on Wall Street has ebbed. Still, the Fed has cut back its forecast for economic growth in the fourth quarter and 2008, giving the dollar little reason to run higher. Both interest rates and expectations about economic growth contribute to a currency's value. Higher rates and strong growth would boost the greenback, while lower rates and a slowdown would add pressure to an already declining dollar. The euro rose to $1.4145 late Wednesday, up from $1.4098 on Tuesday. Investors have flocked to commodities in search of a haven from the dollar, said Wachovia Corp. senior economist Mark Vitner. «Commodities are likely to be a better store of value than holding a particular currency,» he said. «While a currency may depreciate, commodities may remain relatively stable relative to all currencies.» Copper prices rose on both the Nymex and London Metal Exchange, where other industrial metals made gains. Nymex December copper gained 7.65 cents to $3.694 a pound, while nickel, zinc, lead and tin prices jumped on the LME. The resolution of a strike at copper mines in Peru did little to curb rising copper prices. Southern Copper Corp. workers ended their eight-day strike Wednesday after agreeing to a tentative deal on wages and benefits, Dow Jones Newswires reported. Metals traders also brushed off the latest bad news in the U.S. housing market, where weakness has become the norm. The National Association of Realtors on Wednesday lowered its forecast for existing home sales for the eighth time. The trade group expects sales of existing homes to fall 10.8 percent from a year ago and projects new home sales will fall to the lowest level in a decade this year. With economic news otherwise light, traders in the agriculture and energy markets looked ahead to upcoming government reports on product supply and demand. In agriculture, soybean futures led broad gains on the Chicago Board of Trade. Soybeans headed for a second day of sharp gains amid expectations the U.S. Department of Agriculture could scale back its harvest estimates in its crop report due Friday. The monthly report on world inventories and demand will include estimates based on this year's U.S. corn and soybean harvests, which are almost half complete. The USDA has a history of changing acreage numbers in the October report, «so there could be an acreage surprise on Friday,» wrote John Roach of Roach Ag. Marketing Ltd., in a report. December wheat rose 7.5 cents to settle at $8.53 a bushel, while November soybeans surged 18 cents to $9.6825 a bushel. December corn rose 4.75 cents to $3.4725 a bushel. Energy prices recovered from early losses to close above $80 a barrel, as traders squared positions ahead of a report on U.S. petroleum inventories. Expectations are for a large build in crude oil stockpiles and a decline in supplies of gasoline and distillates. The Energy Information Administration reports weekly petroleum inventories on Thursday, one day late due to Monday's Columbus Day holiday. Analysts expect U.S. supplies of crude to rise by 1 million barrels, according to a Dow Jones Newswires survey. Gasoline supplies are forecast to fall by 300,000 barrels, while stockpiles of distillates such as diesel fuel and heating oil are forecast to fall by 600,000 barrels. Gasoline futures added 1.34 cents to close at $2.0336 a gallon on the Nymex, while November heating oil rose 3.19 cents to end at $2.2172 a gallon.
