COMMODITIES-Ends down again on Fed anxiety, mixed US jobs report

Fri Jan 4, 2013 4:49pm 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
 ended down 0.5 percent for the session, and 0.2
percent lower in the first week of 2013.
    Silver futures notched the CRB's sharpest decline of
the day, settling 2.5 percent lower.
    Gasoline futures led declines on the energy front,
closing down 1.2 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 finished down
0.7 percent at $111.31. For the week though, Brent was up nearly
1 percent. 
    U.S. crude futures in New York settled 0.2 percent
lower at $93.09 a barrel. For the week, it rose 2.5 percent.
    U.S. RBOB gasoline closed down 1.2 percent while
heating oil slipped 0.2 percent after the Energy
Information Administration's (EIA) weekly report showed gasoline
inventories rising 2.6million barrels last week and distillate
stocks 4.6 million barrels. 
    Gold prices closed down but rebounded from a 4-1/2 month low
after some investors took the U.S. jobs report to mean the Fed
may retain its monetary stimulus in the near term -- something
that is bullish for bullion.
    "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 0.4 percent to
around $1,657 an ounce late Friday afternoon in New York after
falling more than 2 percent earlier to a session low of around
$1,625. 
    
 Prices at 4:22 p.m. EST (2122 GMT)      
                             LAST/      NET    PCT
                             CLOSE      CHG    CHG
 US crude                    93.10     0.18   0.2%
 Brent crude                111.45    -0.69  -0.6%
 Natural gas                 3.287    0.089   2.8%
 
 US gold                   1648.90   -25.70  -1.5%
 Gold                      1657.30    -5.65  -0.3%
 US Copper                  369.35    -2.35  -0.6%
 LME Copper                8085.00   -79.00  -1.0%
 Dollar                     80.481    0.097   0.1%
 
 
 US corn                    680.25    -9.00  -1.3%
 US soybeans               1389.00   -14.00  -1.0%
 US wheat                   747.25    -8.25  -1.1%
 
 US Coffee                  147.35     0.85   0.6%
 US Cocoa                  2220.00   -36.00  -1.6%
 US Sugar                    18.85    -0.25  -1.3%
 
 US silver                  29.946   -0.774  -2.5%
 US platinum               1555.20   -21.50  -1.4%
 US palladium               688.50    -8.65  -1.2%