February 11, 2014 / 9:31 PM / 4 years ago

COMMODITIES-Gas jumps 5 pct on cold forecasts; gold up on Yellen

By Barani Krishnan
    NEW YORK, Feb 11 (Reuters) - Natural gas futures jumped more
than 5 percent on Tuesday on cold weather forecasts in the
United States and gold hit a 3-month high on incoming Federal
Reserve Chair Janet Yellen's pledge to not accelerate the
winding down of the U.S. stimulus.
    Gasoline and heating oil prices rose about 1
percent each on the persistent U.S. cold weather, and
expectations of another large draw in heating fuel stockpiles.
 
    Cotton was another commodity that rallied, rising 1.5
percent as traders disputed the U.S. Department of Agriculture's
data on Monday that kept the outlook for cotton supply estimates
unchanged despite market expectations for an inventory drop.
  
    Raw sugar was among the few commodities that ended
lower. The sweetener's prices fell for a fourth straight day and
closed more than 1 percent lower from the previous session after
forecasts of rains in Brazil eased worries about crop-stress in
the top sugar growing nation. 
    The Thomson Reuters/Core Commodity Index, a
bellwether for commodities, settled up almost half a percent
after a higher close in 11 of its 19 components.
    Natural gas futures rallied after ending down in four
previous sessions. Traders attributed the turnaround to
forecasts for more cold weather in the short-term.
    Gas has been one of the best performing commodities this
year as demand for the heating fuel spiked from one of the most
frigid winter spells in decades.
    In Tuesday's session, the front-month natural gas contract
on the New York Mercantile Exchange, March, settled up
24.5 cents, or 5.4 percent, at $4.824 per million British
thermal units. It hit a 4-year high of $5.737 per mmBtu last
week. 
    The cold weather blanketing the U.S. Midwest has also pushed
real-time power prices to over $1,000 per megawatt hour for
about 30 minutes. The average power price in Indiana, the most
traded hub in the Midwest, was $37 in 2013.
    Gold gained nearly 1.5 percent after incoming Federal
Reserve Chair Janet Yellen made it clear she would not make any
abrupt changes to the central bank's commitment to a measured
tapering of bond purchases.
    In her first testimony before the U.S. House Financial
Services Committee, Yellen said she strongly supports the
monetary policy approach driven by her predecessor, Ben
Bernanke. 
    "The overall tone of Yellen's comment is a carbon copy of
the Fed's existing policy under Bernanke, so the market is
relieved that there will be no tightening anytime soon," said
Bill O'Neill, partner of New Jersey commodities investment firm
LOGIC Advisors.
    The spot price of gold was up 1.2 percent at $1,290
an ounce by 4:00 p.m. EST (2100 GMT), its biggest one-day gain
in nearly three weeks. Earlier in the session, spot gold hit
$1,293.44, its highest since Nov. 14. 
    Technical buying also helped bullion prices on Tuesday after
the metal crossed a tough resistance at $1,280 an ounce.
    Prices at 4:01 p.m. EST (2100 GMT)      
                             LAST/      NET    PCT
                             CLOSE      CHG    CHG
US crude              99.88    -0.18  -0.2%
Brent crude         108.52    -0.11  -0.1%
Natural gas           4.824    0.245   5.4%
                                                          
US gold             1290.10    15.30   1.2%
Gold                1289.56    15.27   1.2%
US Copper              3.22    -0.01  -0.3%
LME Copper         7076.00   -19.00  -0.3%
Dollar               80.628   -0.014   0.0%
CRB              290.205    1.317   0.5%
                                                          
US corn               441.50    -1.50  -0.3%
US soybeans          1334.75     9.25   0.7%
US wheat              590.25     5.50   0.9%
                                                          
US Coffee            137.15     0.95   0.7%gcg
US Cocoa            2915.00     5.00   0.2%
US Sugar              15.46    -0.18  -1.2%
                                                          
US silver            20.153   19.952   1.6%
US platinum         1387.80     1.90   0.0%
US palladium         716.35    -0.40  -0.1%

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