BLBG: Oil, Copper, Silver Climb on China Manufacturing, Dollar Drop
Crude oil advanced to a seven-month peak and silver gained to the highest since August as Chinese manufacturing expanded for a third month and a falling dollar increased the appeal of non-U.S. assets.
Gold climbed to the highest in more than three months and copper reached a level not seen in seven weeks. Corn rose to the highest since October. Commodities in May had their biggest monthly rally in almost 35 years as global equities rebounded, increasing confidence that the global economy is recovering.
“Economic activities and domestic demand are expanding as more stimulus projects break ground” in China, said Lu Ting, an economist at Merrill Lynch & Co. in Hong Kong. The country’s “recovery may get a further lift as neighboring economies climb out of the slump.”
China’s Purchasing Manager’s Index was a seasonally adjusted 53.1 in May after 53.5 in April, the Federation of Logistics and Purchasing said today. A reading above 50 indicates expansion. Loan growth, accelerating fixed-asset investment and rising retail sales have spurred confidence the government’s 4 trillion yuan ($586 billion) stimulus is working.
The U.S. Dollar Index fell the most in three weeks as speculation General Motors Corp. will file for bankruptcy spurred demand for Japan’s currency. The index, a six-currency gauge that includes the euro and yen, fell as much as 1.7 percent to 79.086, the biggest decline since May 8.
Dollar Weakness
“The dollar’s weakness continued to lend support to commodities, including precious metals and crude oil,” Hiroyuki Kikukawa, general manager of research at IDO Securities Co., said by phone from Tokyo today.
The Reuters/Jefferies CRB Index of 19 raw materials gained 14 percent in May, the most since July 1974 as the dollar touched the lowest level in five months against a basket of six major currencies.
Crude oil for July delivery advanced as much as 69 cents, or 1 percent, to $67 a barrel on the New York Mercantile Exchange, the highest since November. The contract traded at $66.98 a barrel at 11:40 a.m. Singapore time.
Gold for immediate delivery gained as much as 0.5 percent to $983.55 an ounce, the highest since Feb. 24, before trading at $982.79. Cash silver climbed 0.9 percent to $15.88 an ounce, the highest since Aug. 8, before trading at $15.85.
Copper gained 1.4 percent to $4,899 a ton, a level not seen since April 14. July-delivery corn rose 0.2 percent to $4.3725 a bushel after touching $4.3775, the highest since Oct. 9.
