August 29, 2013 / 9:16 PM / in 4 years

COMMODITIES-Oil, gold sink as traders book profit on "Syria rally"

NEW YORK, Aug 29 (Reuters) - Oil and gold markets closed lower on Thursday, giving back some of their sharp gains this week, after anticipated delays in a Western strike on Syria eased worries about oil supplies and investors’ focus on safe-haven assets.

Copper prices extended their losses for a third straight day, nearing three-week lows, as inventories piled up. The dollar’s rally against the euro weighed further on the metal and other commodities priced in the greenback.

Agricultural markets also posted declines, with corn, soybean and wheat ending down as traders took profits from rallies earlier in the week. Arabica, the premium beans for coffee, neared a four-year low on pressure from selling in top growing country Brazil.

The Thomson Reuters-Jefferies CRB index, a closely-watched indicator for commodities ended down 0.6 percent after 15 of its 19 components ended in the negative. Lean hogs , natural gas and orange juice were among the few markets that rose on the CRB, finishing about 1 percent higher each.

In oil, crude markets on both sides of the Atlantic dropped sharply just before Thursday’s settlement as traders took profit on gains from the past two days as timing for the U.S.-led strike on Syria remained uncertain.

Oil traders were also wary of holding large positions ahead of the longer weekend break in the United States due to Monday’s Labor Day holiday, analysts said.

Benchmark Brent crude out of Europe’s North Sea settled down $1.45 at $115.16 a barrel, after trading as low as $114.91 just ahead of the market’s close. It jumped more than 5 percent in the previous two sessions, posting its strongest two-day gain since January 2012.

U.S. crude finished down $1.30 at $108.80 per barrel, not far off the session low of $108.40.

In gold’s case, the market closed down for the first time in six sessions as the West’s response to Syria looked cloudy.

A U.S. government report showing a surprisingly vibrant second quarter growth for the economy also made investors in gold worry that the Federal Reserve might consider quicker and sharper cuts to its stimulus program than previously thought. The Fed’s monthly buying of $85 billion in U.S. bonds has been integral to the rally in gold prices.

At 4:45 p.m. EDT (2045 GMT), the spot price of gold was down 0.7 percent to $1,407.21 an ounce. Even so, the market is on track for its fourth consecutive weekly gain and second straight monthly rise.

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