COMMODITIES-Gold gains, natgas jumps; Goldman bearish on bullion, copper and soy

Mon Jan 13, 2014 3:05pm EST

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By Barani Krishnan
    NEW YORK, Jan 13 (Reuters) - Gold hit one-month highs on
Monday, extending gains from last week driven by weak U.S. jobs
data, even as influential market voice Goldman Sachs predicted a
losing year for bullion and other commodities such as copper and
soybeans.
    The spot price of gold rose about half a percent to
above $1,255 an ounce, its highest since Dec. 12, joining a
broad run-up in the commodities complex on Monday as the dollar
stumbled and U.S. stocks eased.   
    Goldman on Monday forecast a year-end price target of $1,050
for gold that puts the shiny metal on course for a 15 percent
loss from current levels.
    A similar percentage loss in copper for 2014 was
predicted by the Wall Street bank and commodities trader. Copper
futures rose slightly to close at $7,329 a tonne in London but
was still down about 1 percent on the year. 
    In soybeans, Goldman saw a "significant downside"
through the year due to expectations for record South American
output. On Monday, soybeans rallied 1.2 percent to above $12.94
a bushel in Chicago, rebounding from the 6-week low hit in early
January. For the year, soy is little changed. 
 
    Goldman said it was neutral on commodities near-term and
underweight over the longer term, forecasting a 3 percent return
over a 3-month period and negative 3 percent over 12 months.   
    "The uncertainty about oil supplies due to geopolitical
risks in Libya and South Sudan keeps us from taking a stronger
view near term," it said. While it saw a structural bear market
in the distant future, Goldman still recommended holding
commodities in 2014 "from an asset allocation perspective".
    The 19-commodity Thomson Reuters/Core Commodity Index
 rose a modest 0.3 percent on Monday and is down nearly
1.5 percent on the year.
    Oil prices fell, with U.S. crude down nearly 1
percent at $91.80 a barrel while benchmark Brent oil 
slipping about half a percent to below $107. 
    Gold prices surged on Friday after U.S. jobs data for
December showed employers hiring the fewest workers in nearly
three years. Gold traders and investors saw the data as a sign
that the Federal Reserve will take longer to taper bond-buying
and raise interest rates than previously thought.
    Gold, a favorite hedge against the weak dollar and economic
uncertainty, hit record highs above $1,900 in 2011 as the Fed
accelerated its monetary expansion after the financial crisis.
Last year, after a 12-year rally, it fell for the first time,
plunging nearly 30 percent, and the Fed moved to roll back its
stimulus measures. This year so far, it has risen 4 percent.
    Some believe the rebound can continue.
    "If gold prices can sustain the $1,200 key support level,
the majority of the 2014 year could very well remain within the
$1,200-$1,400 range," London-based ETF Securities said in an
report.
    Natural gas and nickel were among the largest gainers on the
CRB on Monday.
    Natgas futures rose over 5 percent in New York
trading, reaching at above $4.26 per million British thermal
units, as cold weather forecasts returned to the northeastern
United States after a brief respite last week. 
    Nickel gained over 2 percent, adding to Friday's
near 4 percent rise, and reached a 2-week high of above $14,215
a tonne, as a ban on unprocessed ore exports from top exporter
Indonesia came into effect. 
    Prices at 2:24 p.m. EDT (1924 GMT)                          
                     
                              LAST      NET    PCT
                                        CHG    CHG
US crude              91.69    -1.03  -1.1%
Brent crude         106.76    -0.49  -0.5%
Natural gas           4.265    0.211   5.2%
                                                          
US gold             1254.00     6.50   0.5%
Gold                1253.54     6.84   0.5%
US Copper              3.39     0.01   0.4%
LME Copper         7323.00    20.50   0.3%
Dollar               80.556   -0.102  -0.1%
CRB              275.980    0.557   0.2%
US corn               434.00     1.25   0.3%
US soybeans          1327.00    23.00   1.8%
US wheat              573.00     4.50   0.8%
                                                          
US Coffee            120.00    -0.65  -0.5%
US Cocoa            2707.00    -5.00  -0.2%
US Sugar              15.63     0.06   0.4%
                                                        
US silver            20.425    0.002   1.0%
US platinum         1435.20     7.20   0.5%
US palladium         740.25    -5.80  -0.8%

 (Editing by Meredith Mazzilli)
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