Commodities Pull Back Late in Day as Euro Retreats

NEW YORK - A late retreat in the euro Tuesday dented a rebound in commodities prices.

Most metals settled higher for the day but off their peak levels. Gains in energy and most grain contracts were wiped out.

The back-and-forth trading came a day after commodities were hammered as the euro fell to a four-year low. That pushed the dollar higher, which is a negative for commodities prices.

"Even though the euro is down a few ticks, a lot of fear is already factored" into commodities prices, said Adam Klopfenstein, a senior market strategist at Lind-Waldock.

Analysts say volatility in the euro has been the primary driver of commodities trading in recent weeks, and they expect the trend to continue. The euro is still moving erratically, and mainly lower, as traders assess an ongoing effort to resolve Greece's debt crisis with emergency loans.

Many question whether Europe's economy can still grow as countries enact cost-cutting measures in order to contain a crisis of confidence in European government debt stemming from Greece's situation.

The dollar has strengthened as a result of the drop in the euro, which hurt commodity prices the past couple of weeks. Commodities are priced in dollars, so they become more expensive when the dollar rises.

Gold has been the notable exception to the recent drop in commodities. Investors have been pouring money into gold because it is considered a safe-haven investment and an alternative to holding currencies.

Gold slid in morning trading when the euro was stronger, and started to move higher as the euro fell. June gold fell $13.50 to settle at $1,214.60 an ounce. It fell as low as $1,206.60 in morning trading at about the time the euro rose to its highest level of the day.

Copper, which fell below $3 a pound Monday for the first time since February, jumped by more than 3 percent Tuesday. Copper for July delivery rose 9.9 cents to settle at $3.031 a pound, having traded as high as $3.069 a pound.

Silver also closed higher, but off its intraday high. July silver rose 2 cents to settle at $18.879 an ounce.

While most metals were able to hold onto some of their gains, energy contracts could not.

Benchmark crude for June delivery fell 54 cents to settle at $69.41 a barrel on the New York Mercantile Exchange, the lowest settlement since Dec. 14.

Crude fell below $70 a barrel for the first time since February on Monday and is down nearly 20 percent from an 18-month high reached just two weeks ago.

In other June energy contracts, heating oil fell 2.37 cents to settle at $1.9615 a gallon. Gasoline settled unchanged at $2.0431 a gallon. Natural gas gave up 5.6 cents to settle at $4.342 per 1,000 cubic feet.

Grain and beans also mostly retreated. July wheat fell 1.25 cents to $4.6775 a bushel, while soybeans dropped 1.5 cents to $9.395 a bushel. Corn stayed positive, rising 3.375 cents to $3.5975 a bushel.

-TheAssociated Press