The U.S. central bank's quantitative easing helped commodity futures rise to their highest level in two years, Bloomberg reports.
Demand for raw materials as a hedge against inflation is one offshoot prompted by the Federal Reserve infusing the world's largest economy by announcing yesterday it would purchase $600 billion worth of assets. The Standard & Poor's GSCI Index of 24 commodities increased as much as 1.5 percent to climb to 576.046 points. That level represents the highest it's been since early October 2008.
"The economy is beginning to show signs of strength," said economist Dennis Gartman in his Gartman Letter, a daily report out of southeast Virginia. "Things are indeed getting better, so the money being force-fed into the system will find its way into equities and into speculation in commodities."
The index was at 585.241 points just before noon in London on Thursday as palladium increased to the highest level it's seen since 2001. White sugar continued its upward trend, reaching levels it hasn't seen in 21 years.
The U.S. Dollar Index decreased to its lowest level in 11 months, which makes commodity prices run low and drives demand for raw materials as investment alternatives.
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