Gold Shoots to 17-Month High on Fresh Fund Buying
Undated (AP) _ Gold prices jumped to a 17-month high Wednesday after the government reported the steepest rise in wholesale prices in 2 1/2 years.
Silver prices also rose sharply. On other commodity markets, orange juice and grain futures rose; oil futures fell; and livestock and meat futures ended mixed.
Gold for June delivery rose $4.50 on New York’s Commodity Exchange to $361.80 a troy ounce, the highest settlement for near-term deliveries since Dec. 11, 1991. May silver surged 12 cents to $4.371 a troy ounce.
The gains followed a Labor Department report that wholesale prices rose 0.6 percent in April, the largest increase since a 1.0 percent gain in October 1990.
Investors historically have valued gold as a hedge against inflation but analysts said Wednesday’s rush to precious metals also was motivated by other factors, including gold’s advance above the key $360 level.
″The psychology of the market is very strong,″ said Tom Griffo, metals analyst with Cargill Investor Services Inc. in New York.
Gold has risen more than 9 percent since March 1 as long-absent investors returned to the long-depressed market.
″The investors are starting to cotton to the fact that we have a major mine supply shortage brewing,″ said Ian MacDonald, manager precious metal trading for the Swiss banking company Credit Suisse.
He said low gold prices have curtailed mine production of gold, which is growing at a relatively low 3 percent per year.
″At the current gold price, we are not going to see any increase in mine supply around the world,″ he said. Mine output is not likely to increase unless prices surpass $400 an ounce, MacDonald said.
Frozen concentrated orange juice for May delivery surged 2.9 cents to $1.034 on the New York Cotton Exchange after the Agriculture Department lowered its orange crop estimate to 11.2 million tons, down 1 percent from last month’s forecast.
After the close of trading, the Brazilian Citrus Exporters Association cut its forecast for Brazil’s 1993-1994 orange crop by 3.7 percent to 282 million 90-pound boxes.
Grain futures rose strongly on the Chicago Board of Trade after the USDA predicted U.S. winter wheat production will rise 12.5 percent this year to 1.81 billion bushels from last year’s 1.61 billion. Grain analysts had forecast a 16 percent increase.
Wheat for May delivery rose 9 1/4 cents to settle at $3.63 a bushel; May corn rose 3 cents to $2.28 1/2 a bushel; May oats rose 3 1/4 cents to $1.44 a bushel; May soybeans fell 1 1/2 cents to $6.02 1/4 a bushel.
On the New York Mercantile Exchange, light sweet crude oil for June delivery fell 14 cents to $20.20 a barrel; June heating oil fell 0.77 cent to 55.14 cents a gallon; June unleaded gasoline dropped 0.51 cent to 60.63 cents a gallon; June natural gas rose 5.8 cents to $2.215 per 1,000 cubic feet.
Live cattle for June delivery fell 0.50 cent on the Chicago Mercantile Exchange to 76.62 cents a pound; May feeder cattle fell 0.35 cent to 86.32 cents a pound; June live hogs rose 0.37 cent to 51.32 cents a pound; May frozen pork bellies rose 1.03 cents to 43.15 cents a pound.