Bloomberg News

Gold Approaches Bear Market, Oil Gains: Commodities at the Close

December 29, 2011

Dec. 29 (Bloomberg) -- The Standard & Poor’s GSCI gauge of 24 commodities rose to close at 645.81 at 3:46 p.m.

The UBS Bloomberg CMCI index of 26 raw materials fell to 1,513.725 at 4:19 p.m.

PRECIOUS METALS

Gold, on the brink of a bear market, posted the longest slump since March 2009 as gains in the dollar reduced demand for precious metals as alternative assets.

The dollar climbed as much as 0.6 percent against the euro as an auction of Italian bonds fell short of the government’s target. Gold, down 12 percent in December, is heading for the biggest monthly drop since October 2008, compared to the greenback’s almost 3 percent gain against a six-currency basket.

Gold futures for February delivery declined 1.5 percent to close at $1,540.90 an ounce at 1:38 p.m. on the Comex in New York. The metal fell for a sixth straight session, the longest slide since March 4, 2009. Today’s settlement leaves prices down 19 percent from a record close of $1,891.90 reached on Aug. 22, about 1 percentage point shy of a bear market. Earlier, prices reached $1.523.90, a five-month low.

Silver futures for March delivery added 0.3 percent to $27.315 an ounce on the Comex. The metal has lost 12 percent this year.

Platinum futures for April delivery declined 1.8 percent to $1,366.80 an ounce on the New York Mercantile Exchange.

Palladium futures for March delivery slumped 3.6 percent to $623.75 an ounce on the Nymex, the biggest drop since Dec. 14.

Precious metal markets: NI PCMKTS <GO>

BASE METALS

Copper climbed for the first time in three days after pending sales of U.S. homes rose more than forecast, boosting demand prospects for industrial metals.

The number of American signing contracts to buy previously owned homes gained 7.3 percent in November to the highest since April 2010, the National Association of Realtors said. Economists forecast a 1.5 percent increase, the median estimate in a Bloomberg News survey. The average home uses about 400 pounds (181 kilograms) of copper in the U.S., the world’s top consumer after China.

Copper futures for March delivery climbed 0.1 percent to close at $3.37 a pound at 1:17 p.m. on the Comex in New York. The price dropped 3 percent in the previous two days.

On the London Metal Exchange, copper for delivery in three months slid 0.5 percent to $7,425 a metric ton ($3.37 a pound).

Aluminum also declined in London. Tin, lead, nickel and zinc advanced.

CRUDE OIL

Crude oil rose on signals the U.S. economy is weathering Europe’s debt crisis and amid speculation that escalating tension in the Middle East may disrupt supplies.

Crude advanced for the seventh time in eight days after a measure of U.S. jobless claims fell to a three-year low and pending sales of existing homes jumped for a second month. Iran threatened this week to block crude shipments through the Strait of Hormuz if sanctions are imposed on its oil exports.

Crude oil for February delivery gained 29 cents, or 0.3 percent, to settle at $99.65 a barrel on the New York Mercantile Exchange. Prices have risen 9.1 percent this year.

Brent oil for February settlement increased 45 cents, or 0.4 percent, to $108.01 a barrel on the London-based ICE Futures Europe exchange.

Crude oil futures: NI CRMKTS <GO>

Europe physical crude: NI CNSMKT <GO>

U.S. physical crude: NI CRGMKT <GO>

Asia physical crude: NI CRAMKT <GO>

OIL PRODUCTS

Heating oil rose as jobless claims slid to a three-year low over the past month and cooler weather was forecast for the U.S. Northeast in January.

Futures gained after Labor Department figures showed the four-week moving average for claims, a less volatile measure than the weekly figures, dropped to 375,000 last week, the lowest level since June 2008. The National Weather Service’s Climate Prediction Center forecast lower-than-normal temperatures Jan. 5-11 from Maine to Florida.

January-delivery heating oil rose 2.41 cents, or 0.8 percent, to settle at $2.9175 on the Nymex. Prices are heading for a 15 percent gain in 2011.

Gasoline futures for January increased 2.88 cents, or 1.1 percent, to $2.6801 a gallon. Prices are up 9.2 percent this year, after climbing 41 percent through April 29.

U.S. oil product futures: NI OPFMKT <GO>

U.S. oil products: NI OPUMKT <GO>

Asia oil products: NI OPAMKT <GO>

Europe oil products: NI OPEMKT <GO>

NATURAL GAS

Natural gas futures dropped to the lowest price in more than two years after a government report showed a smaller-than- forecast decline in U.S. inventories and a growing surplus of the heating fuel.

Gas fell 3 percent after the Energy Department said stockpiles slipped 81 billion cubic feet in the week ended Dec. 23 to 3.548 trillion. Analyst estimates compiled by Bloomberg showed an expected withdrawal of 85 billion. The drop was smaller than the five-year average decline for the week of 122 billion.

Natural gas for February delivery fell 9.4 cents to $3.027 per million British thermal units on the New York Mercantile Exchange, the lowest settlement price since Sept. 11, 2009. The futures have tumbled 31 percent this year.

U.S. natural gas: NI NUSMKT <GO>

U.K. natural gas: NI NUKMKT <GO>

GRAINS, OILSEEDS

Corn fell for the first time in nine sessions and soybeans dropped for a second straight day on speculation that rains will revive dry crops in Brazil, reducing demand for supplies from the U.S., the world’s biggest producer.

About 85 percent of southern Brazil will get 0.25 inch (0.6 centimeter) to 1 inch of rain beginning tomorrow, with the rest of the country getting regular showers for the next week, Global Weather Monitoring said today in a report. Corn has jumped 10 percent since mid-December, and soybeans are up 6.8 percent, as dry weather threatened South American crops.

Corn futures for March delivery fell 0.7 percent to close at $6.38 a bushel at 1:15 p.m. on the Chicago Board of Trade, the first drop since Dec. 15. Still, the grain has gained 1.4 percent this year as world reserves before the 2012 harvest are forecast to drop to a five-year low.

Soybean futures for March delivery declined 0.9 percent to $11.97 a bushel, capping the first two-session drop since Nov. 25. Yesterday, the price touched $12.19, the highest since Nov. 8. The oilseed has slumped 15 percent in 2011 as rising world production slowed overseas demand for U.S. crops.

Wheat futures for March delivery slipped 0.9 percent to settle at $6.4525 a bushel at 1:15 p.m. on the Chicago Board of Trade. The most-active contract has dropped 19 percent this year, heading for the biggest annual slump since 2008.

Grain markets: NI GRMKTS <GO>

SOFT COMMODITIES

Cocoa fell for a fifth session on signs that supplies will be ample as Europe’s debt crisis threatens economic growth. Sugar, cotton and orange juice gained, while coffee slid.

Cocoa for March delivery dropped 2.3 percent to settle at $2,083 a ton at 11:59 a.m. on ICE Futures U.S. in New York, after touching $2,076, the lowest level since Dec. 19. The price has plunged 31 percent this year.

Raw sugar for March delivery climbed 1.6 percent to 23.51 cents a pound on ICE. The sweetener has slumped 27 percent in 2011, after advancing the previous three years.

Cotton futures for March delivery gained 1 percent to 91.63 cents a pound on ICE. Prices have still tumbled 37 percent in 2011, the most among commodities tracked by the GSCI.

Orange-juice futures for March delivery advanced 0.2 percent to $1.6855 a pound in New York. The price has climbed 3.1 percent this year.

Arabica-coffee futures for March delivery retreated 1.1 percent to $2.2425 a pound on ICE. The commodity is down 6.8 percent in 2011, heading for the first yearly drop since 2008.

In London futures trading, cocoa and robusta coffee slid on NYSE Liffe, while refined sugar rose.

Soft commodities markets: NI SOMKTS <GO>

LIVESTOCK

Hog futures fell for a third straight day on signs that demand for U.S. pork is slowing after retailers finished late- year holiday sales. Cattle dropped.

Hog futures for February settlement declined 1.8 percent to close at 83.975 cents a pound at 1 p.m. on the Chicago Mercantile Exchange. The price is down 8.3 percent this month.

Cattle futures for February delivery dropped 0.6 percent to $1.2235 a pound, the third straight loss. The commodity has climbed 13 percent this year, on pace for the third straight annual advance.

Feeder-cattle futures for March settlement slipped 0.4 percent to $1.498 a pound on the CME. Yesterday, the price reached a record $1.508. Futures are up 21 percent this year as the U.S. herd shrank.

Livestock markets: NI LVMKTS <GO>

--Editors: Richard Stubbe, David Marino

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net


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