Elsewhere, precious metals prices rose, while energy prices wavered. Agriculture futures were mixed at midday.

Tighter stockpiles of copper, lead and tin held by the London Metal Exchange helped boost the metals market, while Tuesday's optimism on Wall Street spread through the commodities markets. U.S. equities rallied on expectations of a rate cut next week from the Federal Reserve, and also on an upbeat trade report.

The metals market has been highly sensitive to financial market turmoil and any indication of a slower U.S. economy, said Morgan Stanley analyst Hussein Allidina in a report. Conversely, pickups on Wall Street have helped curtail selloffs in commodities.

Nickel, which sold off 10 percent last week, rose 1.8 percent on the LME, and copper advanced 4.4 percent. On the New York Mercantile Exchange, the December copper contract added 12.6 cents to $3.382 a pound in midmorning trading. LME lead prices rose 4.2 percent, while tin gained 2.7 percent.

Meanwhile, aluminum prices slipped after the LME posted another hefty inflow of inventory.

The U.S. dollar, trading at 15-year lows against several of its peers, lost more territory to the British pound, euro and other major currencies. A weaker dollar can make commodities cheaper for foreign buyers and gold more attractive as a hedge against inflation.

Precious metals edged higher on the Nymex, bolstered by the falling dollar. Gold's move higher also had a technical impetus, said MF Global analyst Tom Pawlicki, as computer-driven buying kicked in once the December contract topped $718 -- the contract's previous high in April. December gold rose $9.50 to $721.70 an ounce in midday trading, while silver and platinum rebounded from Monday's dip lower.

Elsewhere, energy prices fluctuated after Qatar's oil minister said the Organization of Petroleum Exporting Countries agreed to raise production by 500,000 barrels per day. OPEC is already pumping 600,000 to 700,000 barrels per day above the current quota, said Pawlicki, so the increase is largely symbolic. However, he said the question remains whether the group will also overproduce a new quota.

October light, sweet crude rose 10 cents to $77.59 a barrel at midday on the Nymex. Gasoline for October delivery dipped 1.38 cents to $1.9648 a gallon.

Looking ahead to Wednesday's petroleum inventories report, analysts forecast a third straight week of declines in crude oil stockpiles and shrinking gasoline supplies. Analysts polled by Dow Jones Newswires project a 2.7 million-barrel draw on crude inventories and a 500,000-barrel pull on gasoline in storage for the week ended Sept. 7.

In Chicago, agriculture futures were mixed, as investors positioned themselves ahead of Wednesday's Agriculture Department report on world crop supply and demand. December corn fell 4.25 cents to $3.4175 a bushel, while November soybeans shed 1.5 cents to $9.165 a bushel. Wheat for December delivery rose 5.5 cents to $8.665 a bushel.