NEW YORK, USA

Commodity prices rose across the board yesterday on hopes that European leaders were preparing a plan to contain the region’s debt crisis.

Greece’s finance minister said that the country would receive the next round of money in time to avoid a default. German Chancellor Angela Merkel said her country will do whatever it can to help Greece regain investor confidence.

It remains to be seen how such a plan would be structured and whether it will be finalised. However, the mere hint of progress on resolving the crisis was enough to encourage investors who have been worried that the crisis would hurt demand for commodities by slowing the global economy.

Gold, silver, copper and oil led commodities higher. Gasoline, natural gas, soybeans and wheat also rose. Prices for many of those contracts have fallen in the past month.

“Given the size of the sell-off that we had over the last few days, a bounce like today’s is understandable,” MF Global senior market strategist Phillip Streible said.

Commodities also benefited from a weaker dollar. Since commodities are priced in dollars, a weaker dollar makes them cheaper for investors who use other currencies.

Gold for December delivery rose US$57.70, or 3.6 per cent, to end at US$1,652.50 an ounce.

Streible said he believes many investors bought gold as a protection against currency movements and because the price has fallen 9.7 per cent this month. It is still up 16 per cent for the year.

Energy and agriculture products also finished higher.

Benchmark oil rose US$4.21, or 5.2 per cent, to end at US$84.45 per barrel on the New York Mercantile Exchange. Heating oil rose 8.27 cents to end at US$2.8857 per gallon, gasoline futures rose 10.76 cents to US$2.636 per gallon and natural gas rose 3 cents to US$3.875 per 1,000 cubic feet.

September wheat rose 10 cents to finish at US$6.5825 per bushel, December corn rose 4.25 cents to US$6.5225 per bushel and November soybeans rose 3.25 cents to US$12.63 per bushel.

AP