February 29th, 2012

Gold futures fell as much as $100 to below $1,700 an ounce on signs that that the Federal Reserve will refrain from offering more monetary stimulus to bolster the U.S. economy.

In testimony before Congress today, Fed Chairman Ben S. Bernanke gave no signal that the central bank will take new steps to boost liquidity. The dollar rose as much as 0.8 percent against a basket of major currencies, eroding the appeal of the precious metal as an alternative investment. Yesterday, gold reached $1,792.70, a three-month high, even as coin sales by the U.S. mint slumped in February .

“People were expecting that the Fed would loosen policies, even if the perception is that the economy is doing well,” James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in a telephone interview. “The investor sentiment changed as the Fed committed to nothing. This is the manic nature of the market.”

In electronic trading on the Comex in New York, gold futures for April delivery fell $90.30, or 5 percent, to $1,698.10 at 5:14 p.m., compared with yesterday’s settlement. Earlier, the price tumbled as much as $100, or 5.6 percent, to $1,688.40, the lowest for a most-active contract since Jan. 25.

The settlement at the close of floor trading was $1,711.30, down 4.3 percent, the most since Dec. 14. The price, down 1.7 percent this month, has gained 9.2 percent in 2012.

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February 29th, 2012

Soybean futures, poised for the biggest monthly advance since 2010 in Chicago, rose to a five-month high on signs of a second year of global shortage as South American crops wilt amid a drought.

The oilseed has gained 9.6 percent in February, the most since December 2010. Dry weather in South America has slashed output and inventories are forecast by Jefferies Bache LLC to drop 20 percent from the prior year. Oilseed stockpiles will reach a three-year low of 74.1 million metric tons in the 2011- 12 season, researcher Oil World said yesterday.

“The dry weather in South America and the view that yields are going down are starting to gather some momentum,” Neil Burgess, a Sydney-based analyst at Westpac Banking Corp., said by e-mail. “The focus is turning to U.S. supplies and export demand from China.”

Soybean futures for May delivery climbed 0.2 percent to $13.145 a bushel by 1:15 p.m. London time on the Chicago Board of Trade. Prices touched $13.15, the highest level for a most-active contract since Sept. 22. A gain today would be the longest winning streak since the eight sessions through Dec. 27.

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February 29th, 2012

Gasoline futures rose as the U.S. economy expanded more than forecast in the fourth quarter and after a report that stockpiles of the motor fuel fell last week.

Gasoline futures headed for their third straight monthly gain as gross domestic product climbed at a revised 3 percent annual rate, the most since the second quarter of 2010, Commerce Department figures showed today. The industry-funded American Petroleum Institute reported yesterday that gasoline stockpiles fell 916,000 barrels in the seven days ended Feb. 24.

“GDP was good, which plays into the U.S. economic recovery story,” said Phil Flynn, vice president of research at PFGBest in Chicago. “And yesterday’s consumer confidence was a good number.”

Gasoline futures for March delivery rose 2.94 cents, or 1 percent, to $3.0695 a gallon at 9:38 a.m. on the New York Mercantile Exchange. Prices have gained 6.3 percent this month and are up 14 percent in 2012.

March gasoline and heating oil futures expire at the close of floor trading today. The more actively traded April contract advanced 2.84 cents, or 0.9 percent, to $3.2531 a gallon.

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February 29th, 2012

Crude oil futures rose, heading for its best month in New York since October, amid signs of economic recovery and concern that tension with Iran threatens global crude supplies.

West Texas Intermediate futures climbed as much as 0.8 percent after sliding yesterday the most in five weeks. Industrial output in Japan and South Korea beat estimates and U.S. consumer confidence rose to the highest level in a year. Oil has advanced 8.6 percent in February, its first monthly gain in three, as sanctions tighten against Iran, OPEC’s second- biggest producer.

“Oil prices will run up further as U.S. economic data remains supportive, and Iran and Syria continue to give cause for supply-side worries,” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London, who earlier this month correctly predicted Brent crude’s rise to $120 a barrel.

Crude oil futures for April delivery increased as much as 88 cents to $107.43 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.98 at 12:25 p.m. London time. Yesterday, the contract slipped $2.01, or 1.9 percent, to $106.55, the lowest close since Feb. 22 and the biggest drop since Jan. 20.

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February 28th, 2012

Lumber futures may extend their February rally to a 10-month high as China boosts imports and U.S. housing recovers, researcher Wood Resources International LLC said.

Lumber futures prices gained 12 percent in February as of yesterday, second only to silver among 35 raw materials tracked by the Rogers International Commodity Index. Lumber may reach $300 per 1,000 board feet by July on the Chicago Mercantile Exchange, up 8.3 percent from yesterday’s close of $277.10 and the highest since April 6, Wood Resources said.

West Fraser Timber Co., North America’s largest producer, said exports to China “picked up substantially” in the first quarter from the fourth quarter. Shipments climbed to a record in 2011, government data show. U.S. housing starts rose 1.5 percent last month from December to a 699,000 annual rate, the most for a January since 2008 and a sign that residential real estate is stabilizing, the Commerce Department said Feb. 16.

“The general trend should be upward, with more optimism in the market that housing starts should slowly start to increase,” Hakan Ekstrom, the president of Wood Resources, said by telephone from Bothell, Washington. “The west coast of Canada and the U.S. also have China probably starting to buy more lumber again.”

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February 28th, 2012

Dow Jones Futures: The Dow Jones industrial average hovered near 13,000 Tuesday as uneven economic reports held the stock market’s gains in check.

Consumer confidence jumped in February to the highest level in a year. Improved perceptions of the job market pushed the index sharply higher, but the number is still below the level that indicates a healthy economy.

The report, issued at 10 a.m., pushed the Dow Jones industrial average above 13,000, a marker it has broken through repeatedly in the past week during the trading day. The Dow still hasn’t closed above that level since May 2008.

Technology stocks rose the most. Microsoft Corp. and Intel Corp. were among the biggest gainers of the 30 stocks that make up the Dow average.

The Dow’s New Year’s rally has faded since the index first cracked the 13,000 milestone last week. It has been trading sideways after gaining 6.5 percent in the first two months of the year. The Standard & Poor’s 500 rose 9.1 percent in that time, the Nasdaq 14.6 percent.

Ryan Detrick, senior technical strategist with Schaeffer’s Investment Research, said the index often loses momentum after hitting a big, round number, as short-term excitement about the market’s rise gives way to more thoughtful analysis.

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February 28th, 2012

Copper futures rose to a two-week high as German legislators approved a second bailout for Greece, and U.S. and European gauges of economic confidence rose more than expected, pointing to improving growth and metals demand.

German Chancellor Angela Merkel won a parliamentary vote on Greek aid after warning lawmakers that pushing Greece out of the euro would risk “incalculable” damage. Confidence among U.S. consumers jumped in February to the highest level in a year, the Conference Board said today. The European Commission in Brussels said an index of executive and consumer sentiment climbed for a second month.

“Europe is going to do what they can to protect the euro, and there are signs that Greece is starting to live up to their agreements in holding back on spending,” Harry Denny, a broker at Hoboken, New Jersey-based PVM Futures Inc., said in a telephone interview. “The U.S. economy has shown tremendous stability, and that’s adding momentum” in copper-price gains, he said.

Copper futures for May delivery climbed 0.8 percent to $3.9215 a pound at 1:21 p.m. on the Comex in New York, the third straight gain. Prices reached $3.9575, the highest for a most- active contract since Feb. 10.

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February 28th, 2012

Crude Oil fell for a second day after U.S. orders for durable goods dropped in January by the most in three years, signaling slower economic growth and lower fuel demand.

Crude oil futures declined as much as 2.1 percent in New York as data from the Commerce Department showed bookings for goods meant to last at least three years slumped 4 percent. An Energy Department report tomorrow will show U.S. crude supplies rose to the highest level in five months last week, according to the median of analyst responses in a Bloomberg News survey.

“The durable goods numbers do not paint a picture of robust demand going forward,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “We’re going to see builds in this week’s report, which is also putting downward pressure on prices.”

Crude oil futures for April delivery fell $2.02, or 1.9 percent, to $106.54 a barrel at 1:57 p.m. on the New York Mercantile Exchange. The intraday low was $106.30. The contract yesterday slid 1.1 percent to $108.56, ending the longest upward move since January 2010. Prices are up 9.9 percent in the past year.

Brent oil for April settlement dropped $2.54, or 2 percent, to $121.63 a barrel on the London-based ICE Futures Europe exchange.

Durable goods orders were projected to decline 1 percent, according to the median forecast of 80 economists surveyed by Bloomberg News.

Oil also slipped in New York as home prices in 20 U.S. cities dropped to the lowest level since the housing crisis began in mid-2006. The S&P/Case-Shiller index fell 4 percent from a year earlier, a report from the group showed.

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February 28th, 2012

Silver futures prices on Tuesday rallied to their highest since late September tracking gold and buoyed by a retreating dollar, a pending European Central Bank financing operation and expectations that US monetary policy will remain accommodative.

Silver futures hit a five-month high at $36.12 an ounce after breaking through tough resistance at $35.70. It has now recouped much of the hefty decline it posted last September, when it fell 25 percent in just two days.

Following are key facts on silver supply and demand.

SILVER: INVESTMENT

Investment in silver-backed exchange traded products (ETP), which issue securities backed by physical stocks of metal, is recovering. Holdings of the largest silver ETP, New York’s iShares Silver Trust, are up 109.2 tonnes so far this year, having fallen by 255.2 tonnes in the same period of 2011.

The fund’s holdings declined by 1,315 tonnes last year, having peaked at 11,390 tonnes in April.

Sales of silver one-ounce American Eagle coins by the US Mint reached 39.869 million ounces last year, up 15 percent from the previous year.

Monthly coin sales reached a one-year high in January 2012 at 6.107 million ounces.

Speculators in silver raised their net length by 2,551 lots to 28,025 contracts during the week of Feb. 21, the highest level since the week of Sept. 11.

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February 28th, 2012

Gold futures rose for the first time in three sessions in New York as a weaker dollar spurred demand for the metal as an alternative investment. Silver jumped to a five-month high.

The dollar fell for the third time in four sessions against a basket of currencies and the euro rose to a three-month high as the European Central Bank prepares to allot a second round of three-year loans to help the region’s banks tomorrow. Holdings in exchange-traded products backed by gold extended a climb to a record yesterday.

“The dollar’s weakness is supporting gold,” Rick Trotman, a senior research analyst at MLV & Co. in New York, said in a telephone interview.

Gold futures for April delivery advanced 0.3 percent to $1,780 an ounce at 10:15 a.m. on the Comex in New York. Prices declined 0.6 percent in the previous two sessions.

Before today, prices advanced 13 percent this year after a 10 percent increase in 2011, an 11th consecutive annual gain. Holdings in bullion-backed ETPs (.GLDTONS) rose 1.3 metric tons to 2,398.2 tons yesterday, data compiled by Bloomberg show.

NYSE Euronext’s Liffe said it began options trading in gold and silver futures contracts yesterday. The contracts will be available as options on 33.2-ounce mini-gold contracts and 1,000-ounce silver futures contracts, the exchange said in a statement posted on its website.

Silver futures for May delivery rose 1.9 percent to $36.28 an ounce on the Comex, after reaching $36.33, the highest price since Sept. 23. It’s the best-performing precious metal this year, up 28 percent through yesterday.

- Nicholas Larkin in London, Glenys Sim in Singapore and Debarati Roy in New York at Bloomberg.