ECB bond-buying plan benefits commodities

A new bond-buying plan to help ease Europe's debt crisis is benefiting commodity prices.

The European Central Bank said Thursday that it will buy unlimited amounts of government bonds from countries struggling with massive debt.

That should make it cheaper for them to borrow money.

Gold topped US$1,700 per ounce for the first time in six months after the news was announced.

Prices for oil, silver, wheat and corn also rose.

The bank's announcement was the first of two major developments that commodities traders have been anticipating this week. Up next is Friday's report on the US job market. Economists predict it will show employers added 135,000 jobs last month. The unemploy-ment rate is expected to stay unchanged at 8.3 per cent.

That likely would lead to higher prices for most commodities.

Gold for December delivery rose US$11.60 to finish at US$1,705.60 per ounce and December silver rose 34.5 cents to US$32.674 per ounce.

Other commodities rose on expectations that demand could pick up if the global economy grows stronger.

Benchmark oil gained 17 cents to end at US$95.53 per barrel after hitting US$97.71 per barrel earlier in the day.

Heating oil increased 2.49 cents to US$3.1425 per gallon, gasolene rose 4.12 cents to US$2.991 per gallon and natural gas fell 1.9 cents to US$2.776 per 1,000 cubic feet.

Industrial metals were mixed. October platinum gained US$10.80 to end at US$1,586.40 per ounce, December palladium increased 80 cents to US$647.75 per ounce and December copper fell 1.25 cents to US$3.5165 per pound.

In agricultural contracts, December wheat rose 24 cents to finish at US$8.9175 per bushel, December corn increased 7.75 cents to US$7.985 per bushel and November soybeans dropped 0.5 cent to US$17.47 per bushel.

- AP