Broad selloff in commodities follows S&P cut in Greece, Portugal credit ratings; gold shines

Commodities see broad sell-off on Europe; gold up

NEW YORK — Commodities sold off broadly Tuesday after Standard & Poor’s slashed its credit ratings on Greece and Portugal, sending investors out of riskier assets.

Gold was one of the few commodities to rise. Energy, grains, non-precious metals and soft commodities mostly fell.

Gold for June delivery jumped $8.20 to settle at $1,162.20 an ounce on the Comex division of the New York Mercantile Exchange.

“The Greek news is the main source of negative news for the commodities that are down,” Tom Pawlicki, an analysts at MF Global Research in Chicago, said.

Despite the broad market sell-off in commodities, Pawlicki said he had expected Ford Motor Co.’s strong first-quarter earnings to help support prices for platinum and palladium. Both metals are used in making catalytic converters for cars and trucks.

July platinum prices fell $2.40 to settle at $1,720.90 an ounce; palladium for June delivery fell $1.75 to settle at $548.95 an ounce.

Other metals fell. July silver fell $2.20 to settle at $18.15 an ounce; copper fell 1.65 cents to settle at $3.36 a pound.

The dollar rose sharply against other currencies as investors reduced their exposure to risk. The euro was particularly weak against the dollar as investors took the latest downgrades as signals of poor confidence in Europe’s shared currency.

The euro slid to $1.3184 from $1.3383 in New York, a large move downward. The ICE Futures US dollar index, which measures the dollar against six other currencies, rose nearly 1 percent, also a large move.

The dollar’s strength also hurt commodities. Since most commodities are priced in dollars, their value tends to fall when the dollar rises because that decreases demand from foreign investors.

Europe’s worsening credit crisis overshadowed the testimony of Goldman Sachs executives before a U.S. Senate subcommittee examining the firm’s role in the financial crisis.

S&P cut Greece’s debt to junk status. It lowered Portugal’s debt two notches, to A-minus from A-plus. Shares in Europe fell, pushing U.S. stocks lower, too. The Dow Jones industrial average tumbled 213 points to 10,991.99.

Investors were already worried about Greece’s debt crisis, but the downgrade renewed concerns other European countries may also need help.

The news comes a week after Greece trigged a joint bailout package from the International Monetary fund and its neighbors. But Germany has been reluctant to help shore up Greece without greater assurances that it will do more to rein in government spending.

In agricultural commodities, wheat for July delivery rose 2.5 cents to settle at $4.905 a bushel.

July soybeans fell 1.6 cents to settle at $9.93 a bushel, while corn for July delivery fell 5.75 cents to settle at $3.5375 a bushel.

Oil fell for a second straight day as traders watched whether Fed policymakers will keep interest rates at record lows. Crude dropped $1.76 to settle at $82.44 a barrel.

Cocoa, orange juice concentrate, coffee and sugar futures all fell. Pork bellies rose.