Commodities prices fall as dollar extends gains
NEW YORK —Commodities mostly fell for a second day as a stronger dollar weighed on prices.
Commodities are priced in dollars, so when the currency increases in value, futures become more expensive and less attractive for foreign buyers.
Gold for December delivery slid $12.60 to $946.90 an ounce on the New York Mercantile Exchange. The metal is normally seen as a safeguard against inflation and a weak dollar.
Meanwhile, benchmark crude for September delivery fell 33 cents to settle at $70.60 a barrel on the Nymex.
The dollar’s latest gains follow a jump Friday that came when the government reported that employers slashed fewer jobs last month and that the nation’s unemployment rate fell for the first time in 15 months. That was a surprise to investors, who had expected an increase in unemployment.
The drop in many commodities prices again Monday occurred as the Dow Jones industrial average fell for the third time in four days, slipping 32 points. Investors are cautious this week ahead of quarterly profit reports from retailers and a meeting of the Federal Reserve on interest rates. Still, stocks are up sharply in the past month on hopes that the economy is starting to pull itself from the recession.
The dollar has charged higher as investors boost their expectations for the economy and the state of the government’s finances. If the economy begins to recover, the Federal Reserve likely would raise interest rates to head off inflation. A higher rate would make the dollar more appealing to investors, and further hurt commodities.
Among soft commodities, sugar rose 5.7 percent and cocoa advanced 2.2 percent.
Copper, silver, and other metals fell after spiking Friday following the jobs report. Investors have been betting that demand would rise if the economy begins to recover.
September copper futures fell 1.5 cents to $2.7705 a pound and aluminum fell 3.1 percent.
Precious metals lost ground. September silver fell 31.3 cents to $14.3550 an ounce, while October platinum fell $17.60 to $1,250.90 an ounce.
In other Nymex trading, gasoline for September delivery gained about 1.9 cents to settle at $2.0274 a gallon, while heating oil added 0.0154 cents to settle at $1.9276.
Grain prices were mixed on the Chicago Board of Trade.
December wheat futures rose 3.25 cents to $5.20 a bushel, while corn for December delivery rose 4 cents to $3.3050 a bushel.
November soybeans fell 28.5 cents to $10.10 a bushel.
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