NEW YORK Dec 23 Commodities ended broadly lower in thin trading on Monday, with a few markets like natural gas and zinc being the exception, as players pared risk ahead of the year-end holidays.
Gold edged lower on heightening concerns over deflation, oil slipped on profit-taking after three days of gains and cocoa fell from a 2-year high, consolidating from last week's rally.
The Thomson Reuters/Core Commodity CRB index settled down 0.4 percent after losses in 14 of its 19 components. Nickel, aluminium, sugar and cotton were among markets that lost about 1 percent or more.
Trading volumes were light across commodities, with players wary of putting on significant positions ahead of the impending Christmas and New Year holidays.
"The few traders who are in the office are likely to be booking profits instead of building a new position," said Addison Armstrong, senior director of market research at Tradition Energy in Stamford, Connecticut.
Gold edged lower, heading for its biggest annual loss in three decades and facing further downside forecasts for 2014.
Bullion is on track to end the year down nearly 30 percent at a six-month low below $1,200 an ounce, and some forecasters said the market could break under the April 2010 bottom of below $1,050 in the new year.
Since the Federal Reserve announced the first tapering of the U.S. monetary stimulus last week after finding the economy strong enough for such action, many gold bulls have fled the precious metal.
While the Fed only cut $10 billion from its monthly asset purchases of $85 billion, analysts said the impact was predominantly psychological.
"Deflation has been the only thing running on people's minds after the Fed action, not inflation, and that isn't helping gold," said Ralph Preston, futures analyst at HeritageWestFutures.com in San Diego, California.
"If the economy stays on track, I think gold will snap the July 2010 low of $1,170 in the next few weeks and take on the April 2010 lows of $1,050 in short order," Preston said.
The spot price of gold was down 0.4 percent to $1,198.57 an ounce. U.S. gold futures for February delivery were down 0.5 percent at $1,198.10.
In oil, U.S. crude CLc1 fell 41 cents to settle at $98.91 a barrel in New York, off a two-month high of $99.40 reached in the previous session. In London, benchmark Brent crude ended 21 cents lower at $111.56 per barrel.
U.S. natural gas futures reached a near 2-1/2 year high on forecasts that cold will follow the mild weather the East Coast has recently experienced and on last week's report of strong drawdowns in storage.
The front-month gas contract in New York reached $4.532 in early Monday trading, surpassing Friday's high of $4.492, which was the highest price since July 21, 2011.
Zinc prices rose to their highest level in nearly 10 months, the biggest gainer in the base metals complex, lifted by tightening supplies and robust imports by China.
Three-month zinc on the London Metal Exchange rose to a session high of $2,071, its highest level since March 1. It closed at $2,057 a tonne, up from a last bid of $2,039. (Editing by Leslie Gevirtz)