Commodities advance on BoJ stimulus plan, strong financial data from US
Key commodities advanced on Wednesday as investors bet on Bank of Japan's plans to shore up the world's third-largest economy and strong data from the US, China and Germany. Gold hovered near a one-month high intraday, copper inched up to a near one-and-a-half-week high, Malaysian palm oil scaled a near three-week peak and US crude oil rose faster than brent, narrowing the spread.
The Bank of Japan's decision on Tuesday to make an open-ended pledge to buy assets to prop up the economy boosted appetite for risky assets like oil and metals. Expectations that the US would extend debt limit by 4 months, defusing fears of default, made some investors wager on gold on Wednesday.
Gold dazzled on expectations that easy monetary policies of central banks against a strengthening global economic recovery would make assets, including commodities, riskier. Spot gold hovered at one-month high of $1,691.84 an ounce intraday, while US futures traded nearly flat at $1,692.10.
Brent crude rose 10 cents at $112.52 a barrel intraday. Investors are awaiting inventory data from the US.
Malaysian palm oil rose on concerns over rough weather in Argentina and southern Brazil affecting the global supply of edible oils.
Copper gained support from good outlook from mining groups, including BHP Billiton that expects strong copper output for a fifth straight year. Three month copper on the London Metal Exchange was up 0.1% at $8,142 a tonne by 1130 GMT.