Commodities advanced after tumbling to their lowest level in almost 10 months as price declines attracted buyers. Sugar rose the most in more than a month in New York.
The Standard & Poor’s GSCI Spot Index advanced 0.3 percent to 600.94 by 12:57 p.m in London after slumping as much as 2.6 percent to the lowest since Dec. 1. Coffee jumped the most in more than a month and aluminum advanced the most in more than three weeks.
“Commodities are taking back some of the losses that we’ve seen in the past week,” said Arne Lohmann Rasmussen, the head of rates, foreign exchange and commodities strategy at Danske Bank A/S in Copenhagen. “If you can handle the huge swings, prices are starting to look a bit attractive.”
European policy makers are facing mounting pressure to step up efforts to prevent their sovereign-debt crisis from further roiling the world’s financial markets and economy. European Central Bank policy makers are likely to next week debate restarting their covered-bond purchases along with further measures to ease monetary conditions, a euro-region central bank official said.
The S&P GSCI Spot Index ended last week down 21 percent from the almost three-year high in April, meeting the common definition of a bear market. The last time the index fell that much was in 2008 when the global economy sank into its worst slump since World War II. Earlier today, cash silver plunged as much as 16 percent to its lowest level since November and copper slumped as much as 7.6 percent, a seventh day of declines and the worst losing streak since December 2008.
Sugar Advances
Raw sugar for March delivery advanced as much as 3 percent, the most since Aug. 24, as an 18 percent drop over the past month spurred buying interest. Egypt’s state-run Sugar and Integrated Industries Co. bought 50,000 metric tons of raw sugar at a tender yesterday, paying $628.60 a ton to Eridania, Hussein Ahmed, a purchasing manager at the company said today. The sweetener was lastly up 0.66 cent, or 2.7 percent, at 24.79 cents a pound by on ICE Futures U.S. in New York.
Arabica coffee for December delivery rose 1.7 percent, to $2.3535 a pound on ICE.
Crude oil for November gained 0.2 percent to $80.06 a barrel on the New York Mercantile Exchange.
Money managers cut the combined net-long position across 18 futures and options by 20 percent in the week ended Sept. 20, the most since February 2010, data from the U.S. Commodity Futures Trading Commission show.
Silver Slumps
Silver for immediate delivery slumped 8.2 percent to $28.59 an ounce, after earlier today touching $26.07. Cash gold fell 2 percent to $1,623.90, almost $300 below its record $1,921.15 an ounce on Sept. 6, after earlier today touching $1,532.72, the lowest level since July.
“A rising fear factor coupled with sinking confidence levels should be helping gold, but this isn’t happening because of overriding concerns about liquidity, European bank funding and margin calls amid a stronger U.S. dollar,” UBS AG analyst Edel Tully said in a report today. “For now, investors are only finding comfort in the relative safety of cash.”
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
