Fri Nov 23, 2012 3:13pm EST
* Gold up 1.4 percent to lead commodities higher
* CRB index up 0.5 percent to one-month high
Nov 23 (Reuters) – Commodity markets rose to their highest in a month on Friday as signs of progress in Greek aid talks and upbeat German economic data pressured the U.S. dollar and elevated raw materials.
In a post-Thanksgiving trading session marked by early closes and moribund volumes, gold set the pace for the broad-based rally with a 1.4 percent jump — aided by a technical breakthrough and options dealing — while oil and grains saw modest gains, supported by fundamental factors.
The Thomson Reuters-Jefferies CRB index, a global commoditiesbenchmark, climbed 0.5 percent to its highest close since Oct. 23. It gained 1.9 percent over the week, the best weekly performance since mid-September. The index had slumped nearly 10 percent in the two months until early November.
Macro-economic factors were in focus through Friday’s thin session, withGreece saying the International Monetary Fund had relaxed its debt-cutting target for the country, suggesting lenders were closer to a deal for a vital aid tranche to be paid. But other sources involved in the talks cautioned that the funding gap was far bigger than Greece has suggested.
Officials who failed earlier this week to agree on how to curb Greece’s debt will make a third attempt at resolving the issue on Monday.
A day after downbeat EU manufacturing data depressed market sentiment, the Munich-based Ifo think tank said its business climate index rose for the first time in seven months for November, far surpassing even the highest forecasts.
“It looks like there’s some strength in the oil market today on the back of high hopes on a stronger (European Union),” said Carl Larry, president of Oil Outlooks and Opinions LLC.
The U.S. dollar index fell 0.9 percent as the euro gained, while U.S. stock markets gained more than 1 percent before their early midday close.
In oil markets, where trading volumes were about one-third of normal, U.S. crude outpaced European Brent after news of a spill that briefly shut Enbridge’s 318,000 barrel per day Line 14 near Mokena, Illinois, earlier in the week.
Traders were also keeping a close eye on the fragile two-day truce between Israel and Palestinians, after the hostilities sent Brent prices to one-month highs earlier this week.
Benchmark Brent settled 83 cents higher at $111.38 a barrel, while U.S. crude closed at $88.28 a barrel, up 90 cents from Wednesday’s settlement.
Gold rose $23.45 to $1,752.50 an ounce, punching above the 50-day moving average that had capped the market for the past month.
“It’s definitely a technical breakout above the 50-day moving average for the short term. If we break above $1,800, the next real significant resistance will be the prior all-time high near $1,900,” said Adam Sarhan, CEO of Sarhan Capital.
Silver streaked 2.5 percent higher to $34.10 an ounce, its highest in six weeks. It has gained more than 10 percent since early November as traders bet on further stimulus.
Grain markets saw limited gains, aided in part by data showing weekly corn and wheat export sales were higher than analysts had expected. Cocoa futures climbed to a one-month high, but coffee and sugar fell by nearly 2 percent as hefty supplies kept prices pinned near their lowest in years.