Associated Press

NEW YORK (AP) -- Commodities prices rose sharply Tuesday as the dollar weakened and investors jumped back into riskier assets following upbeat economic and earnings reports.

Better-than-expected profits at Merck and Barclays provided hopeful signs on the economy. Traders bid up riskier investments like stocks and commodities while shedding safe-haven assets like the dollar.

"When the dollar is down, it gives you a green light to buy commodities," said Jason Ward, an analyst with Northstar Commodity in Minneapolis.

The ICE Futures US dollar index, which measures the dollar against six other currencies, fell 0.8 percent. A cheaper dollar makes commodities, which are priced in dollars, more attractive to foreign investors. Factor in improving signs of economic recovery, and commodities were set for big gains.

Industrial metals jumped following the strong signals on economic growth. The Empire State manufacturing index rose to 24.91 this month, compared with a forecast of 18 and a reading of 15.92 in January.

Silver for March delivery rose 70.1 cents, or 4.5 percent, to $16.148 an ounce, while copper jumped 13.75 cents, or 4.2 percent, to $3.2395 a pound.

Platinum for April delivery rose $26.60 to settle at $1,537.70 an ounce, while palladium for March delivery gained $14.30, or 3.4 percent, to settle at $432.45 an ounce.

April gold rose $29.80, or 2.7 percent, to settle at $1,119.80 an ounce. It was the first time in nearly two weeks gold traded above $1,100.

Energy prices also mostly rose as the dollar tumbled and the economy showed signs of strength. Benchmark crude for March delivery rose $2.88 to settle at $77.01 a barrel.

In other energy trading, heating oil for March delivery rose 7.74 cents to settle at $1.9963 a gallon, and gasoline climbed 5.87 cents to $1.9882 a gallon. Natural gas was one of the few decliners on the day, losing 15.8 cents to settle at $5.310 per 1,000 cubic feet.

Meanwhile, grains received a boost from the bounce in energy and metals prices, Ward said.

"We're playing follow-the-leader," Ward said.

Wheat, soybeans and corn also rose because there is less selling pressure on the commodities than there had been over the past six weeks.

Grains had been mostly falling since the middle of January when the Department of Agriculture's monthly crop report showed an abundance of supply. That sparked a big sell-off, especially among hedge funds. Hedge funds have now sold most their positions in the commodities, which has eased the selling pressure, Ward said.

May wheat rose 18.25 cents, or 3.6 percent, to settle at $5.195 a bushel. Soybeans rose 20.5 cents to $9.745 a bushel, while corn rose 5.75 cents to $3.79 a bushel.

Copyright 2010 The Associated Press.

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