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Commodity prices climb higher thanks to strong US data, allayed EU concerns

By Michael Bellart  (Global Times)

08:31, August 20, 2012

Global commodities futures maintained their momentum Friday after a series of mostly positive macroeconomic data emerged out of the US, especially in the petroleum, base metal and precious metal sectors.

The benchmark three-month copper contract on the London Metal Exchange (LME) rose 0.9 percent Friday to finish at $7,539 per ton, extending a 0.9 percent gain after the Chinese mainland markets closed Thursday. The two-day rally helped the contract end in positive territory for the week.

Meanwhile, Nymex West Texas Intermediate crude oil added 0.5 percent Friday to close at $96.01 per barrel, extending a 1.5 percent jump after the domestic markets closed Thursday.

The most-traded December Comex gold future closed at $1,619.20 per ounce Friday after rising 0.9 percent late Thursday.

The three contracts all got a boost in post-Asian trading Thursday after German Chancellor Angela Merkel said publically that the European Central Bank's policy for preventing the euro's collapse was "in line" with the views of European leaders.

The news was greeted warmly by traders of commodities that are sensitive to macroeconomic news, especially news out of the EU, which has been a key driver of crude oil and metals prices this year.

Steady initial jobless claims and a surprisingly strong increase in new building permits in the US also helped push commodity prices higher, according to analysts from the Australian bank ANZ.

"The standout release was July building permits, rising 6.8 percent month-on-month to 812,000, their highest in nearly four years," the analysts said in a note Friday. "This augurs well for housing starts over the coming month or two, and a further upswing in construction activity."

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