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Expected rate rise in Europe hits commodity prices

Oil, gold and silver have surged to peaks as investors positioned themselves for the end of ultra-loose monetary policy in Europe.

The surge in commodities prices comes as investors fear a repetition of the spike in raw materials markets seen in June and July 2008, when the European Central Bank surprised the market with a rate rise.

Commodity prices are denominated in dollars: as the US currency weakens against the euro, raw material prices move higher. The euro rose to a 14-month high of $1.435 on Wednesday.

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