COMMODITIES-Metals drop after Bernanke testimony, but oil keeps gains
NEW YORK, July 17
NEW YORK, July 17 (Reuters) - Commodity markets were mixed after Federal Reserve Chairman Ben Bernanke testified to Congress, with gold and copper sliding more then 1 percent and crude oil prices maintaining the session's gains.
"Traders would be very cautious in taking fresh positions given that they have been burnt on both sides, on the dovish side as well as the hawkish side," said Ben Le Brun, an analyst at OptionsXpress in Sydney.
The 19-commodity Thomson Reuters-Jefferies CRB index finished 0.18 percent lower, weighed down by drops in metals and grains prices.
Congressional testimony by the Fed chief confirmed market expectations that the central bank still intends to begin scaling back its stimulus program this year if U.S. economic recovery continues as policy makers expect.
But Bernanke stressed that nothing was set in stone and the Fed could change plans if the economy either improved faster than expected or worsened.
Gold prices fell more than 1 percent as the dollar rose against major currencies after Bernanke said the Fed would likely reduce its $85 billion monthly purchases of Treasuries and mortgage-backed securities later in 2013, halting quantitative easing (QE) altogether by mid-2014.
"The market is woken up to the fact that we are seeing the end of tapering and the potential end of QE, and that takes the brush off the rose," said Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC.
Spot gold fell 1.3 percent to $1,275.84 an ounce by 4:25 p.m. EDT (2025 GMT), sharply below a session high at $1.300.16 an ounce, its first peek above $1,300 in three weeks.
Copper fell 1.4 percent to below $7,000 a tonne, giving up the previous session's 1.2 percent gain.
Meanwhile, oil prices rose, brushing off Bernanke's statement as, "no big change," according to one analyst.
Crude oil ended slightly higher, while gasoline prices fell slightly after the U.S. Energy Information Administration reported further draws in American crude stockpiles and larger-than-expected increases in gasoline inventories. The oil market barely budged after Bernanke's testimony.
Brent crude traded up 47 cents to settle at $108.61 a barrel. West Texas Intermediate gained 48 cents to settle at $106.48 a barrel. RBOB gasoline fell for the first time in three days, down over 2 cents at $3.1101 a gallon.
U.S. corn prices fell 1.7 percent on forecasts for rainier weather than previously thought in the U.S. Midwest, easing fears about heat and dryness. Soybeans were mixed as the more favorable weather outlook pressured post-harvest prices.
New York-traded coffee futures rose to a multi-week high on concern that a forecast for low temperatures in top producer Brazil could mean frost for crops in some areas. (Reporting by Carole Vaporean; Editing by David Gregorio)