* QE3 rekindles gold as Fed targets jobs and growth, not
inflation
* Buy the rumor, hold on the fact as oil, copper nudge
higher
* CRB index nears bull market territory since June low
By Jonathan Leff
NEW YORK, Sept 13 (Reuters) - Major commodities including
oil and copper rose on Thursday after the Federal Reserve
announced its latest plan to revive the U.S. economy, while gold
jumped 2 percent, the biggest gainer from a move markets have
priced in for weeks.
Prices jumped immediately after the Fed said it had agreed
to buy $40 billion of mortgage debt per month and keep
purchasing assets until the jobs outlook improves substantially.
Financial markets had expected a third set of quantitative
easing to get growth back on track.
By day's end, gold had extended gains to nearly 2
percent or $33.50, reaching its highest close since February at
$1,764.50 an ounce. Other markets posted less robust gains.
London copper rose just over 1 percent in post-close
trade while Brent crude oil rose 0.5 percent.
Trading volume across the commodity futures markets was
among the most active in months, with many traders waiting to
hear from the Fed before taking post-summer positions. Gold
futures trade was nearly double its 30-day average, while U.S.
oil futures activity was nearly 40 percent more.
Many commodity markets had already risen to multi-month
highs ahead of the new round of Fed bond buying, which investors
expect to eventually stoke growth, fuel inflation, weaken the
dollar and attract more investment in riskier assets.
The Thomson Reuters-Jefferies commodity index rose
0.5 percent, rising for the sixth straight session, the longest
streak since February. The index is up 18.9 percent since a June
low, nearing bull market territory.
The Fed's plan offered relatively few surprises, meeting
expectations for more bond buying and an extension of the
ultra-low interest rate pledge to mid-2015. The most significant
shift was the committee's decision to tie the duration of its
bond-buying program to economic conditions, rather than a finite
sum.
"The idea is to quicken the recovery to help the economy
begin to grow quickly enough to generate new jobs and reduce the
unemployment rate. So that is the criterion we are looking at,"
Chairman Ben Bernanke told a press conference.
Trading was volatile in the wake of the announcement. U.S.
stock markets pushed higher as the news settled in, and the Dow
Jones industrials and SP 500 stock index closed more than 1.5
percent higher. The U.S. dollar index fell.
GOLD JUMPS 2 PERCENT
Spot gold jumped 2 percent to $1,766.40 an ounce as
of 1:58 p.m. EDT (1758 GMT) after hitting a high of $1,772.11,
within striking distance of a 2012 high of $1,790, set Feb. 29.
Gold is up 13 percent this year following a 10 percent rally
since the start of August as central banks around the world
appeared more determined to take up further stimulus. For some
gold bulls, who have struggled over the past 12 months as prices
stalled, it was the start of new chapter in a decade-long rally.
"They (the Fed) are emphasizing the growth mandate, and that
means they don't care about inflation other than giving lip
service to it," said Axel Merk, chief investment officer at Merk
Funds, which has $600 million in currency mutual-fund assets.
"The price of gold will do very well in the years to come,"
Merk said.
OIL WAVERS, THEN RISES
Brent November crude, which becomes the prompt month
contract on Friday, rose 55 cents to settle at $115.88 a barrel.
The session high was $116.89, its highest since May.
Crude has climbed steadily over the past week, bolstered by
supply concerns, unrest in oil producing countries and
anticipation of Fed stimulus. Brent and U.S. crude have risen
toward technical levels that indicate they may be overbought.
However gasoline prices fell more than 1 percent,
dropping for a second day.
"People are unwinding positions because you have the end of
driving season, more refining capacity back on line after the
storm and last week supplies were up in the Northeast region,"
said Sal Umek, analyst at the Energy Management Institute in New
York.
COPPER CHECKS RALLY PAST $8,000
London Metal Exchange (LME) three-month copper ended
down $21 at $8,075 a tonne prior to the Fed news, then rallied
in after-hours business to $8,200.50, its highest since May 8.
It has risen more than 6 percent in the last five days.
Since last Friday, copper has broken above the $7,800
ceiling that had contained previous rallies for months, and
broke out above $8,000 on optimism that demand for the metal
will rise due to $157 billion in infrastructure spending planned
in top consumer China and fresh measures to tackle the euro zone
debt crisis.
"Copper still has the China factor, but we're still in a
weak economic cycle. I wouldn't be buying things as related to
any sudden optimism for industrial demand," said Bill O'Neill,
partner of LOGIC Advisors in Upper Saddle River, New Jersey.
Prices at 3:48 p.m. EST (1947 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US crude 98.11 1.10 1.1% -0.7%
Brent crude 116.88 0.92 0.8% 8.8%
Natural gas 3.037 -0.026 -0.8% 1.6%
US gold 1772.10 38.40 2.2% 13.1%
Gold 1764.99 33.99 2.0% 12.9%
US Copper 372.70 1.70 0.5% 8.5%
LME Copper 8075.00 -21.00 -0.3% 6.3%
Dollar 79.252 -0.485 -0.6% -1.2%
CRB 317.450 1.750 0.6% 4.0%
US corn 773.75 4.25 0.6% 19.7%
US soybeans 1747.25 1.50 0.1% 45.8%
US wheat 902.00 12.00 1.4% 38.2%
US Coffee 178.85 1.35 0.8% -21.6%
US Cocoa 2613.00 -18.00 -0.7% 23.9%
US Sugar 19.71 -0.01 -0.1% -15.2%
US silver 34.716 1.483 4.5% 24.4%
US platinum 1678.50 29.90 1.8% 19.5%
US palladium 688.50 9.70 1.4% 4.9%
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