COMMODITIES-Gold and cocoa rally, other U.S. markets quiet after snowstorm

Fri Jan 3, 2014 12:55pm EST

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By Barani Krishnan
    NEW YORK, Jan 3 (Reuters) - Gold hit two-week highs and
cocoa also rallied while many other commodities were down or
little changed on Friday after a snowstorm hit the east coast of
the United States, keeping traders from their desks and thinning
market volumes.
    A firmer dollar also weighed on demand for
commodities priced in the U.S. currency from holders of the euro
. The dollar firmed as global markets were mixed ahead of
a speech by Federal Reserve chairman Ben Bernanke that could
indicate when the central bank was likely to make deeper cuts in
its economic stimulus policy. 
    The 19-commodity Thomson Reuters/Core Commodity CRB index
 was down 0.2 percent by 12:30 p.m. ET (1730 GMT) as
a heavy snowstorm and dangerously low temperatures hit the
northeastern United States, delaying flights, paralysing road
travel and closing schools and government offices.
 
    For the week, the CRB was headed for a drop of more than 2
percent, its worst weekly slide in two months, after factoring
in losses in three of the past four trading sessions.
    "The outlook for commodities isn't all that great in 2014,
and with the confluence of the snowstorm and back-to-back
holidays, it isn't surprising that we're seeing a slow trot into
the new year," said Adam Sarhan, president at Sarhan Capital, a
New York-based financial advisory.
    Gold rose to a two-week high as the precious metal saw fresh
buying after hitting a six-month low earlier this week. Weaker
global demand for equities since the start of the year also
helped bullion recapture some its faded allure as a safe-haven
asset.
     The spot price of bullion was up 1 percent at around
$1,237 an ounce after hitting $1,238.70 earlier - its highest
since Dec. 18. It was on course for a 2 percent weekly gain.
    Gold's gains came after it lost nearly 30 percent in 2013,
ending a 12-year bull run, largely due to Fed's move to unwind
its long-running monetary stimulus. 
    Cocoa futures rebounded in both New York and London trading
after hitting seven-week lows in the previous session.
    "It was looking oversold," a London-based cocoa broker said,
explaining the rebound.
    The front-month March cocoa contract in New York was
up 2.4 percent at $2,699 a tonne.
    London's March cocoa was also up 2.4 percent, at
1,717 pounds a tonne, after sliding to a Dec. 18 low of 1,674
earlier on Thursday.
    Fundamentally, the outlook for cocoa had improved with   
many traders predicting a sharp tail-off in cocoa arrivals at
ports in top growing country Ivory Coast in the coming weeks
because of drier than normal weather. 

 (Editing by Grant McCool)
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