COMMODITIES-Down again on Fed anxiety, mixed U.S. jobs report

Fri Jan 4, 2013 1:42pm EST

* Oil, metals slip again on worries over Fed's direction
    * Dollar's strength weighs further on commodities
    * Soybeans hit 6-week bottom, cocoa 8-1/2 month lows
    * Mixed US jobs report comforts some, worries others

    By Barani Krishnan
    NEW YORK, Jan 4 (Reuters) - Oil and metals prices fell for a
second straight day on Friday as investors weighed the
possibility of the U.S. Federal Reserve ending its highly
stimulative monetary policy and as data showed anemic jobs
growth in the country.
    The dollar's rally to a six-week high against other major
currencies also made it costlier for investors using
other currencies to acquire dollar-denominated commodities such
as crude oil, gold and copper.
    Crop prices were down too, but more due to supply and demand
factors.
    Soybeans hit a six-week bottom in Chicago on prospects for a
bumper harvest of South American soy and China's cancellation of
U.S. soybean orders. Cocoa plumbed 8-1/2 month lows in London
before recovering; raw sugar a 3-week trough in New York. 
 
    The 19-commodity Thomson Reuters-Jefferies CRB index
 was poised to end 0.7 percent down for the session,
and 0.4 percent lower in the first week of 2013.
    Silver notched the CRB's sharpest decline of the day,
falling 3 percent for a second day in a row.
    Gasoline led declines on the energy front, sliding nearly 2
percent.
    "The focus now turns back to the U.S. fiscal issues that are
left outstanding, and the surprising minutes from the Fed," said
Edward Meir, commodities analyst at Intl FC Stone.
    The Fed's December policy meeting minutes, released on
Thursday, showed several officials of the central bank
considering a slowdown or stop of asset purchases that investors
have figured into their economic outlook. The Fed's balance
sheet of nearly $3 trillion risks instability with further
expansion, the officials had reasoned. 
    The news jolted markets that had just emerged from weeks of
nervous trading caused by the U.S. fiscal crisis, which was only
partially resolved on Dec. 31 with a deal that averted tax hikes
for most Americans in 2013. 
    In Friday's session, sentiment was mixed after a U.S. jobs
report for December showed a continued pace of hiring in the No.
1 economy, although employment remained below satisfactory
levels. Further clouding the picture was data from the Institute
for Supply Management, which showed the U.S. service sector
growing at its fastest pace in 10 months in December. 
  
    "The oil market may be back to a situation where good news
is bad news, meaning this morning's good jobs number may cause
the Fed to end stimulus sooner," said Phil Flynn, analyst at
Price Futures Group in Chicago.
    Oil's benchmark Brent crude in London fell more than
1 percent to a session low of $110.38 a barrel, back below its
100-day moving average of $111.22. For the week though, Brent
was up nearly 1 percent.
    U.S. crude futures in New York was near flat at
$92.82 a barrel, back above the 200-day moving average of
$91.76. For the week, it rose 2.4 percent.
    Rising stockpiles of crude in the United States, the world's
largest oil consumer, also pressured prices on Friday. 
    U.S. RBOB gasoline fell 1.3 percent while heating oil
 slipped 0.4 percent after the Energy Information
Administration's (EIA) weekly report showed gasoline inventories
rising 2.57 million barrels last week and distillate stocks 4.57
million barrels. 
    Gold fell more than 1 percent but rebounded from a 4-1/2
month low after some investors in the bullion market viewed the
U.S. jobs report for December as bearish, and suggesting that
the Fed may retain its monetary stimulus in the near term.
    "Investors think that the payroll report is still not enough
to change the Fed's accommodative policy, which is a positive
for gold," said Howard Wen, metals analyst at HSBC.
    The spot price of bullion was down 1.3 percent at
$1,641.70 an ounce, after falling to $1,625.79, its lowest price
since late August. It was headed for a sixth week of losses,
which would be its longest losing streak since June 1999.
    
 Prices at 1:19 p.m. EST (1819 GMT)                
 
                              LAST      NET    PCT
                                        CHG    CHG
 US crude                    92.98     0.06   0.1%
 Brent crude                111.23    -0.91  -0.8%
 Natural gas                 3.277    0.079   2.5%
 
 
 US gold                   1646.90   -27.70  -1.7%
 Gold                      1645.94   -17.01  -1.0%
 US Copper                  369.35    -2.35  -0.6%
 LME Copper                8106.00   -58.00  -0.7%
 Dollar                     80.600    0.213   0.3%
 
 
 
 US corn                    681.50    -7.75  -1.1%
 US soybeans               1387.25   -15.75  -1.1%
 US wheat                   741.00   -14.50  -1.9%
 
 
 US Coffee                  146.50     0.00   0.0%
 US Cocoa                  2220.00   -36.00  -1.6%
 US Sugar                    18.84    -0.26  -1.4%
 
 
 US silver                  29.850   -0.870  -2.8%
 US platinum               1557.30   -21.50  -1.4%
 US palladium               687.50    -9.65  -1.4%
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