theres just not enough gold..................., page-10

Commodities Higher Before Fed Decision
By STEVENSON JACOBS – 7 hours ago

NEW YORK (AP) — Commodities prices climbed broadly Thursday as expectations of another U.S. interest rate cut and rebounding global equities markets boosted investors' appetite for gold, grains and other hard assets.

The Federal Reserve meets next week and investors widely expect the central bank to cut its benchmark federal funds rate by at least a half point; some expect a sharper three-quarter point reduction, matching the cut made by the Fed on Tuesday. Those expectations helped undercut the dollar, boosting the appeal of commodities as a hedge against inflation.

Precious metals futures surged, with gold topping $900 an ounce for the first time in a week.

"Clear expectations that the Fed will cut once again next week, and cut until some signs of stabilization emerge, continue to fuel the precious metal," Jon Nadler, senior analyst at Kitco Bullion Dealers Montreal said in a research note.

Gold for February delivery jumped $23 to $906.10 an ounce on the New York Mercantile Exchange, after earlier rising as high as $911.10. March silver climbed 33 cents to fetch $16.30 an ounce, while copper added 10.45 cents to $3.1765 a pound.

Also boosting precious metals was the stunning recovery on Wall Street, which sought to extend its gains Thursday on positive U.S. jobs data that at least momentarily tempered fears of a U.S. recession that have unnerved investors. The Labor Department reported that the number of people applying for unemployment benefits fell to its lowest level in fourth months.

"It's clear that there's been a return of risk appetite to the market and that has boosted metals," said Ashraf Laidi, chief foreign exchange strategist at CMC Markets in New York.

Gold has made sharp gains in the past year and hit an all-time record of $916.10 an ounce earlier this month. Still, when adjusted for inflation, gold remains well below its record high. An ounce of gold at $900 in 1980 would be worth about $2,300 today.

The dollar's decline against the 15-nation euro has also boosted gold's appeal. A weaker greenback makes dollar-denominated commodities more attractive to investors, especially overseas buyers.

The euro strengthened against the dollar in late morning trading, fetching $1.4734.

Meanwhile, agricultural futures rose on the Chicago Board of Trade, with soybeans rising sharply on growing global demand for the grain used to feed livestock and make biofuel.

Soybeans for March delivery jumped 31.5 cents to $12.21 a bushel on the CBOT, after earlier rising as high as $12.25.

Wheat for March delivery added 7 cents to $912 a bushel, and March corn gained 12.75 cents to $4.82 a bushel.

In energy markets, crude oil rose after a government report of a drop in heating oil supplies and a proposed economic stimulus plan outweighed investors' concerns about the economy.

Light, sweet crude for March delivery rose 81 cents to $87.80 a barrel on the Nymex.

Other energy futures traded mixed. February gasoline was mostly flat at $2.2490 a gallon on the Nymex, and February heating oil rose 2.58 cents to $2.4472 a gallon.