COMMODITIES-Gold tumbles on firm US data; natgas up again on cold

Thu Dec 12, 2013 4:58pm EST

By Barani Krishnan
    NEW YORK, Dec 12 (Reuters) - Gold tumbled 2 percent on
Thursday as upbeat U.S. retail sales data stoked expectations of
a cut soon in the Federal Reserve's stimulus program, and
natural gas prices rose for a fourth straight day as colder
weather gripped the United States.
    Coffee and silver were among other commodities that posted
major price moves.
    Robusta coffee, grown primarily in Vietnam and
traded in London, hit a near 3-1/2 month high after a drawdown
in exchange-certified inventories of the beverage commodity.
 
    Silver fell 4 percent in what traders described as
typical of the precious metal that tends to post exaggerated
moves in sympathy with gold prices.
    The losses in gold, silver and other markets such as
aluminum, gasoline, soybeans and corn
 weighed on the broader commodity complex, tracked by the
Thomson Reuters/Core Commodity CRB index. 
 
    The CRB fell 0.3 percent after Reuters data showed losses of
1 percent or more in eight of the 19 markets it tracks.
    The spot price of gold fell 2 percent to $1,226.86 an
ounce by 4:20 p.m. EST, extending Wednesday's 0.7 percent drop.
It was the biggest two-day slide in the precious metal since
Oct. 1.
    The selloff in gold came after data showed U.S. retail sales
rose solidly in November. It was another sign of a strengthening
economy after last week's better-than-expected U.S. nonfarm
payrolls and GDP data, which could encourage the Fed to ratchet
back stimulus efforts.
    A two-year U.S. budget deal also cleared a procedural hurdle
in the House of Representatives on Thursday, with passage
expected. A budget deal should also move the Fed toward tapering
its $85 billion-a-month bond-buying program.
    "With the possibility of the budget debate behind us, it
could bring to the forefront that the Fed is one step closer to
tapering at its December meeting next week," said David Meger,
director of metals trading at Chicago futures brokerage Vision
Financial Markets. 
    The front-month contract for natural gas settled up
7.2 cents at $4.409 per million British thermal units, after a
weekly government storage report showed inventories fell more
than normal. Prices earlier rose to $4.434, the highest since
May and only a penny off a two-year record. 
    A boom in drilling for natural gas in shale formations over
the last decade has pushed gas output in the United States to
record highs, driving prices in 2012 to below $2 per mmBtu,
their lowest level in 10 years. Since then, prices have
rebounded but have often balked around the $4 mark.
    But some technical traders said the rally may not last for
long, noting the market was at its most "overbought" in nearly
10 years. Since December began, gas futures have gained more
than 9 percent. 
    
    Prices at 4:32 p.m. EDT (2132 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
US crude              97.36    -0.08  -0.1%    6.0%
Brent crude         108.52    -1.18  -1.1%   -2.3%
Natural gas           4.409    0.072   1.7%   31.6%
                                                          
US gold             1224.90   -32.30  -2.6%  -26.9%
Gold                1227.00   -24.35  -1.9%  -26.7%
US Copper              3.30     0.00   0.0%   -9.8%
LME Copper         7226.00     6.00   0.1%   -8.9%
Dollar               80.165    0.272   0.3%    4.4%
CRB             280.158   -0.859  -0.3%   -5.0%
                                                          
US corn               428.25    -3.00  -0.7%  -38.7%
US soybeans          1323.75   -20.25  -1.5%   -6.7%
US wheat              622.50    -7.75  -1.2%  -20.0%
                                                          
US Coffee            111.30     1.60   1.5%  -22.6%
US Cocoa            2787.00    32.00   1.2%   24.6%
US Sugar              16.30    -0.21  -1.3%  -16.5%
                                                          
US silver            19.453   19.249   1.5%  -35.6%
US platinum         1364.40   -20.80   0.0%  -11.3%
US palladium         720.25   -18.30  -2.5%    2.4%

 (Editing by Jim Marshall)
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