Commodities Back in Favor as Investors Flee to Safety

Commodities are enjoying a strong surge again, as the U.S. dollar fell, financial institutions waver, and investors flee equities looking for a safe haven.

Gold was the major recipient of the commodity surge, as it exploded by over $60 an ounce to end at $850.50 an ounce on the NYMEX during regular trading, and already going as high as $870.90 an ounce in after hours trading.

Silver also enjoyed a resurgence, as it had its biggest one-day increase in price since December 31, 1979, growing by $1.158 an ounce to settle at $11.675.

Oil also partook in the commodity uptick, as October delivery for light sweet crude in New York surged by $6.01 dollars to finish the session at $97.16.

A key factor in the overall strength in commodities today was the decline of the U.S. dollar, which dropped against most major currencies today, with the dollar index falling to 78.159, from the 79.149 it was at on late Tuesday.

Commodities are denominated in U.S. dollars, one of the reasons its weakness spurred part of the commodity rally.

A number of grains, including corn, soybeans and wheat also enjoyed solid growth today, as corn gained 22 cents a bushel to close at $5.54 on the CBOT, while soybeans jumped by 26 cents to $11.39 a bushel.

Even with high global wheat inventories putting downward pressure on the grain, the numerous factors putting commodities back in favor were enough to push wheat upward again, as it ended at $7.25-3/4 a bushel, up 35-3/4 cents, a 5.18 percent upward move.