By SANDY SHOREMost commodity prices rose Thursday as back-and-forth negotiations continued over the U.S. budget. Gold, industrial metals, oil and soybeans ended higher on the day. Natural gas, wheat and corn fell. Investors hope the Obama administration and Congress can agree on a new budget by the end of the year, preventing automatic cuts to government spending and steep tax increases from going into effect. Commodity prices have been uneven this week as investors have made trades based on the day's headlines about how the talks are progressing. Economists believe the lack of a budget agreement could push the U.S. back into a recession, which would cut demand for commodities such as industrial metals, oil and other energy products. "This is a continuing seesaw of investor sentiment going into the final weeks of these fiscal cliff negotiations. Today, you have people feeling better again about the fiscal cliff and the economy going forward," Kingsview Financial analyst Matt Zeman said. "Now, again, how long this will last, who knows?" Commodities also benefited from positive news about the U.S. economy. The Commerce Department said the economy grew at a faster rate than initially thought during the second quarter. Separately, the National Association of Realtors said an index measuring pending contracts to buy homes jumped last month. Steady job gains and record-low mortgage rates have made home buying more attractive for Americans. Gold for February delivery rose $10.70 to end at $1,729.50 per ounce. In March contracts, silver rose 66.1 cents, or 2 percent, to $34.431 per ounce, copper gained 6.8 cents to $3.6055 per pound and palladium ended up $12.25 at $687.45 per ounce. January platinum gained $7.80 to $1,619.50 an ounce. Other commodities were mostly higher. Benchmark oil rose $1.58, or 1.8 percent, to finish at $88.07 per barrel. Heating oil gained 3.26 cents to $3.0406 per gallon and wholesale gasoline rose 5.31 cents, or 1.9 percent, to $2.787 per gallon.
Natural gas fell sharply after the Energy Department said natural gas supplies rose last week. The inventory level is 5.2 percent above the five-year average. Natural gas fell 15.3 cents, or 4 percent, to end at $3.648 per 1,000 cubic feet.Agricultural contracts were mixed. Wheat for March delivery fell 5.75 cents to end at $8.855 per bushel and March corn fell 5.25 cents to $7.5875 per bushel. January soybeans rose 1.75 cents to $14.48 per bushel.