SALON

Friday, Dec 30, 2011 9:10 PM UTC

Gold And Corn End Year Higher, Even After Sell-off

By

Topics: From the Wires,

Gold and corn prices ended the year higher Friday, even after sell-offs that wiped out big gains from a summer rally.

The February gold contract rose $25.90, or 1.7 percent, to settle at $1,566.80 an ounce. Corn for March delivery gained 8.5 cents to $6.465 per bushel. Both gold and corn hit all-time highs this summer, and both commodities fell this winter for different reasons.

Not all metals ended the year higher. The downturn this fall left both silver and copper down for the year, with copper dropping more than 20 percent.

But gold and corn, two of the most high-profile commodities, kept their value from a volatile year. Gold was driven higher by anxious traders who didn’t want to invest in riskier stocks or bonds. Corn prices shot up on worries of a global food shortage. Those worries receded this fall as stocks rose and food supplies grew.

Even though prices have fallen, many traders think 2012 could offer another roller coaster of a ride for commodities investors.

“I think it’ll happen all over again,” analyst George Gero said about the spike in gold prices. He said 2011 marks the 11th straight year that gold has closed higher. With political tensions brewing in North Korea and Iran, and financial problems continuing in Europe, Gero said gold’s rise is far from over.

Corn prices have already started climbing again on persistent worries that growing demand will outstrip supplies. Booming demand for livestock and crop-based fuels has outpaced farmers’ ability to grow more food.

Gold is still up about 10 percent from its closing price of $1,421.40 at the end of last year.

This summer was a hot one for commodities trading.

Gold closed at a record high of $1,891.90 Aug. 22. The big jump came after ratings agency Standard & Poor’s downgraded U.S. debt, leading investors to become fearful of turbulence in financial markets. That anxiety make gold a relatively safe bet for investors looking to protect their money.

Gold prices started to sink this autumn after traders started to think gold prices had been driven too high by speculators. Inflation fears also started to decline after reports showed the U.S. economy was gaining steam, and the dollar started to gain value against the euro.

Corn rose and fell for different reasons. For the past decade, demand for grain and beans has risen faster than supplies. More consumers in Asia are eating meat, so the livestock industry there is buying more feed. In the United States, federal ethanol mandates mean that about 40 percent of the U.S. corn crop is used to make gasoline.

The supply worries pushed corn to a record $7.99 in June. But the high prices lured farmers into planting more corn. A hot summer didn’t damage the corn crop as much as traders thought it would, and by this fall the world corn supply looked much healthier than investors expected.

The surplus corn prices pushed corn below $6 a bushel, which made prices negative for the year. But prices rose in December because hot weather in South America might cut exports from that region. Corn is now slightly higher than the $6.29 closing price at the end of last year.

Most commodities closed higher Friday. March silver gained 60 cents to end at $27.915 an ounce. Still, silver is down 10 percent from its closing price of $30.94 on Dec. 31 last year.

Copper for March delivery gained 6.6 cents Friday to end at $3.436 per pound. That leaves copper down 23 percent from its closing price of $4.45 per pound on Dec. 31.

Other industrial metals also gained Friday. March palladium gained $32.40 to $656.15 an ounce. January platinum rose $38.10 to $1,404.90 an ounce.

March wheat gained 7.5 cents to finish at $6.5275 per bushel. January soybeans rose 10.75 cents to $12.0775 per bushel.

Benchmark crude oil lost 82 cents to finish at $98.83 per barrel on the New York Mercantile Exchange. Heating oil fell 0.59 cents to end at $2.9142 per gallon, gasoline futures dropped 1.2 cents to $2.6574 per gallon and natural gas lost 3.9 cents to $3.016 per 1,000 cubic feet.

More Christopher Leonard.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments are not enabled for this story.

follow salon

Most Read

Popular on Reddit

links from salon.com

vote
New Yorker launches tool by Aaron Swartz to protect leaks: Strongbox, co-created by the late technologist, is an open-source drop box for leaked documents
173 points174 points | 6 comments
vote
New Yorker launches tool by Aaron Swartz to protect leaks: Strongbox, co-created by the persecuted late technologist, is an open-source drop box for leaked documents
130 points131 points | comment
vote
Obstruction will ruin the GOP: Playing politics and abusing the system can excite the extremes, but it's a recipe for long-term political disaster
41 points42 points | 8 comments
vote
Loaded terminology like "entitlements" and "welfare" skews the debate and alters America. How right-wingers use semantic tricks to kill government.
16 points17 points | 9 comments
vote
Obstruction Will Ruin GOP - Playing politics & abusing the system can excite the extremes, but it's a recipe for long-term political disaster
14 points15 points | comment

From Around the Web

Presented by Scribol
listener_new_rect The Listener: So long, Sookie Stackhouse

Recommendations