Commodity prices rise on positive economic news

December 21st, 2011

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Category: Miscellaneous

(Businessweek) – Commodities are rising across the board on hopeful economic news in Europe and an increase in new U.S. home construction.

Benchmark oil rose 3.4 percent Tuesday, gold rose 1.3 percent and wheat rose 1.3 percent.

German business and consumer confidence increased unexpectedly in December and the Spanish government completed a successful debt auction. Both developments are easing some concerns over the region’s debt crisis.

The U.S. government says the number of new homes under construction jumped 9.3 percent in November to the highest level in nearly two years. The increase was encouraging for the depressed housing industry.

Commodities also are benefiting from a weaker dollar. Since commodities are priced in dollars, a weaker dollar makes them more of a bargain for traders who use other currencies.

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