Metal prices climb after better-than-expected durable goods, home sales reports

Metals get a boost from upbeat economic reports

NEW YORK — Metal prices rebounded Wednesday following reports that reassured investors the U.S. economy is recovering.

The Commerce Department said durable goods orders and new home sales both jumped sharply in April. Those two reports mean demand for metals could grow because many metals are used in manufacturing and homebuilding.

Fears of a global economic slowdown had hurt some metal prices in recent weeks, particularly more volatile ones like platinum and palladium. Any signs that the recovery is faltering could crimp demand and hurts prices.

While it appears demand should hold up for industrial metals in the near term based on the latest economic data, analysts say platinum and palladium could also rise in the coming month because of potential supply issues.

Most of the world’s platinum and a large portion of palladium is mined in South Africa. With the monthlong World Cup soccer competition set to kick off in South Africa on June 11, analysts say electricity could be scarce in the country.

Carlos Sanchez, an analyst with CPM Group, said electricity could be controlled during the World Cup. That could mean cutting power to certain parts of the country, which would slow mining of the metals, he said. Any drop in supply would help prices.

Platinum and palladium prices spiked in 2008 because similar shortages in South Africa sapped mines of electricity.

Platinum for July delivery rose $38.40, or 2.6 percent, to $1,530.30 an ounce. Palladium for June delivery, rose $15.95, or 3.7 percent, to $446.35 an ounce.

Copper, another metal used predominantly for industrial purposes, rose 3.85 cents to settle at $3.0805 a pound.

Gold also got a boost because of further weakening in the euro. In recent weeks, gold has been trading as an alternative to currencies. The euro has plummeted because of worries that mounting debt in countries like Greece, Spain and Portugal will slow an economic recovery on the continent and possibly around the world.

The euro is hovering near a four-year low against the dollar. It fell to $1.2204 Wednesday.

Tom Pawlicki, a commodities analyst with MF Global, said gold is currently able to benefit from both risk appetite and aversion.

Gold, like other commodities, gets a boost when investors are moving back into riskier assets. It also benefits from investors worried about the health of the economy because they are looking for safe-havens to stash money, Pawlicki said.

That means gold could climb back to a new record in the coming weeks. It reached a record high of $1,249.70 an ounce two weeks ago.

June gold rose $15.40 to settle at $1,213.40 an ounce Wednesday.

Energy prices also recovered Wednesday, with benchmark crude climbing back above $71 a barrel. The Commerce Department said orders for big-ticket manufactured goods rose 2.9 percent last month, more than double what economists had forecast. Transportation orders were the primary driver of the rise, which means oil demand should eventually rise as those goods are delivered.

Benchmark crude for July delivery rose $2.76 to settle at $71.51 a barrel on the New York Mercantile Exchange.

Among other energy contracts, gasoline for June delivery rose 3.96 cents to settle at $1.9704 a gallon. Heating oil rose 4.9 cents to $1.9207 a gallon, while natural gas rose 10.4 cents to $4.155 per 1,000 cubic feet.

Grain and bean prices also benefited from investors’ moving back into riskier assets. Wheat for July delivery rose 1.25 cents to settle at $4.6175 a bushel, while corn rose 7.25 cents to $3.715 a bushel. Soybeans rose 7.5 cents to close at $9.38 a bushel.