Oct. 5 (Bloomberg) -- Commodities rebounded from the lowest in 10 months after Federal Reserve Chairman Ben S. Bernanke said that the central bank may take further steps to sustain an economic recovery.
The Standard & Poor’s GSCI index of raw materials rose 2.8 percent to settle at 592.03 at 3:48 p.m. New York time, the biggest gain since Sept. 27. Energy and agricultural prices led the rally. Crude oil had the biggest increase since May, while wheat advanced the most in two months. Yesterday, the commodity gauge touched 572.92, the lowest since Nov. 26.
Bernanke affirmed a plan to keep interest rates low at least through mid-2013. The Fed may reduce the rate paid on banks’ reserve deposits or buy more securities, he said. Today, U.S. data on payrolls and service industries topped forecasts by analysts. The MSCI All-Country Index of equities gained as much as 2.1 percent.
“Commodities are rallying on the back of higher risk appetite and prospects of more Fed action,” said Eugen Weinberg, the head of commodities research at Commerzbank AG in Frankfurt. “It’s a macro- and sentiment-driven rally after the massive losses recently, and may continue for a while, though the risks remain to the downside.”
Oil in New York jumped 5.3 percent after the U.S. government reported an unexpected supply decline. Wheat in Chicago gained 3.5 percent as exports climbed from the U.S., the world’s biggest shipper.
The GSCI has dropped 6.3 percent this year. The gauge is down 22 percent from a 32-month high in April on persistent concerns that Europe’s debt crisis will hinder the global economy, eroding demand for raw materials.
--With assistance from Elizabeth Campbell and Whitney McFerron in Chicago. Editor: Patrick McKiernan
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