* Economic uncertainty hangs over markets after weak US data
* Copper stays below $7,000 level critical to market bulls
* Grains down broadly; cocoa sugar also slide
By Barani Krishnan
NEW YORK, April 22 Brent crude oil returned to
above $100 a barrel on Monday and gold rallied its most since
last week's historic drop but copper remained below a level
critical to market bulls, underscoring the economic uncertainty
hanging over commodities.
Grains from corn to wheat and soybeans
all fell roughly 1 percent each on forecasts for better crop
weather across a broad swath of the soggy U.S. crop belt.
Among other crops, cocoa retreated from a four-month
high, posting its largest daily loss in a month on
profit-taking. Sugar also fell, pressured by accelerated
harvesting in top producing country Brazil.
The 19-commodity Thomson Reuters-Jefferies CRB index
was down slightly, with 12 of its 19 components in
The CRB hit a nine-month low on Wednesday as investors fled
from commodities on fears of stalling China growth, threat of
fresh euro zone troubles and uncertainty whether the U.S.
Federal Reserve would continue without slowing bond purchases
that had fueled over two years price growth in raw materials.
The Chicago Federal Reserve reinforced worries about U.S.
economic growth after issuing on Monday a negative reading on a
national activity index that investors had expected to come in
News of disappointing corporate earnings and
lower-than-expected existing home sales in the world's top
economy also caused markets to give back part of their gains for
Investor hesitation was particularly palpable in oil, where
prices gained along with equities, but had difficulty holding on
to their peaks due to worryingly high stockpiles of U.S. crude.
"There's still a sense of trepidation with regard to demand,
especially with supplies what they are," said Stephen Schork,
editor of energy news letter The Schork Report.
"We seem to have a lot of inventory and questionable demand,
and that's hanging over the market."
London's Brent crude settled up 74 cents, or 0.7
percent, at $100.39 a barrel. It had risen to a session high of
U.S. crude ended the day at $88.76 a barrel, up 75
cents or 0.9 percent.
Gold rose more than 2 percent, supported by strong physical
buying that helped it pull away from last week's two-year low.
Despite the rebound, the technical outlook for gold barely
improved with bullion prices remaining down more than 15 percent
on the year.
Investors also reduced bullion holdings in the top
exchange-traded fund to the lowest in nearly three years.
"Physical demand is giving the price a psychological boost,
but don't think that could make up for the 65-tonne outflows
from ETFs last week," Saxo Bank senior manager Ole Hansen said.
"The market is obviously looking for someone to show an
interest to buy at these levels but it's quite a traditional
set-up that we have a sell-off and then tentative recoveries the
The spot price of gold was up 1.5 percent at around
$1,425 an ounce, after a session-high at $1,438.66 per ounce. It
hit a two-year low on April 16, after falling more than $125 a
day earlier -- its biggest loss in a day in dollar terms.
Copper fell almost 1 percent to trade close to 1-1/2 year
lows amid disappointing global growth and higher supply
prospects that kept the metal below the $7,000 tonne level
critical to market bulls.
Three-month copper on the London Metal Exchange
ended at $6,935 a tonne from $6,990 at the close on Friday,
having earlier fallen as low as $6,815, just $15 short of a
1-1/2-year low hit last week.
"There has been a focus on copper because it has been
trading at a significant premium to its accepted fair value,"
said Deutsche Bank analyst Daniel Brebner. "Between now and
mid-year we will see $6,500 a tonne, but if you're a trader,
you'd be looking at this as a (buying) opportunity."
Prices at 4:12 p.m. EDT (2011 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US crude 88.81 0.75 0.9% -3.3%
Brent crude 100.53 0.88 0.9% -9.5%
Natural gas 4.267 -0.141 -3.2% 27.3%
US gold 1421.00 25.70 1.8% -15.2%
Gold 1426.11 22.26 1.6% -14.8%
US Copper 314.40 -1.90 -0.6% -13.9%
LME Copper 6935.00 -55.00 -0.8% -12.6%
Dollar 82.646 -0.068 -0.1% 7.7%
US corn 645.75 -6.25 -1.0% -7.5%
US soybeans 1417.25 -11.00 -0.8% -0.1%
US wheat 702.25 -6.75 -1.0% -9.7%
US Coffee 142.50 0.85 0.6% -0.9%
US Cocoa 2299.00 -20.00 -0.9% 2.8%
US Sugar 17.87 -0.10 -0.6% -8.4%
US silver 23.324 0.364 1.6% -22.8%
US platinum 1435.80 12.50 0.9% -6.7%
US palladium 681.90 4.85 0.7% -3.0%