COMMODITIES-Down again on Fed anxiety, mixed U.S. jobs report
* Oil, metals slip again on worries over Fed's direction
* Dollar's strength weighs further on commodities
* Soybeans hit 6-week bottom, cocoa 8-1/2 month lows
* Mixed US jobs report comforts some, worries others
NEW YORK, Jan 4 (Reuters) - Oil and metals prices fell for a second straight day on Friday as investors weighed the possibility of the U.S. Federal Reserve ending its highly stimulative monetary policy and as data showed anemic jobs growth in the country. The dollar's rally to a six-week high against other major currencies also made it costlier for investors using other currencies to acquire dollar-denominated commodities such as crude oil, gold and copper. Crop prices were down too, but more due to supply and demand factors. Soybeans hit a six-week bottom in Chicago on prospects for a bumper harvest of South American soy and China's cancellation of U.S. soybean orders. Cocoa plumbed 8-1/2 month lows in London before recovering; raw sugar a 3-week trough in New York.
The 19-commodity Thomson Reuters-Jefferies CRB index was poised to end 0.7 percent down for the session, and 0.4 percent lower in the first week of 2013. Silver notched the CRB's sharpest decline of the day, falling 3 percent for a second day in a row. Gasoline led declines on the energy front, sliding nearly 2 percent. "The focus now turns back to the U.S. fiscal issues that are left outstanding, and the surprising minutes from the Fed," said Edward Meir, commodities analyst at Intl FC Stone. The Fed's December policy meeting minutes, released on Thursday, showed several officials of the central bank considering a slowdown or stop of asset purchases that investors have figured into their economic outlook. The Fed's balance sheet of nearly $3 trillion risks instability with further expansion, the officials had reasoned. The news jolted markets that had just emerged from weeks of nervous trading caused by the U.S. fiscal crisis, which was only partially resolved on Dec. 31 with a deal that averted tax hikes for most Americans in 2013. In Friday's session, sentiment was mixed after a U.S. jobs report for December showed a continued pace of hiring in the No. 1 economy, although employment remained below satisfactory levels. Further clouding the picture was data from the Institute for Supply Management, which showed the U.S. service sector growing at its fastest pace in 10 months in December.
"The oil market may be back to a situation where good news is bad news, meaning this morning's good jobs number may cause the Fed to end stimulus sooner," said Phil Flynn, analyst at Price Futures Group in Chicago. Oil's benchmark Brent crude in London fell more than 1 percent to a session low of $110.38 a barrel, back below its 100-day moving average of $111.22. For the week though, Brent was up nearly 1 percent. U.S. crude futures in New York was near flat at $92.82 a barrel, back above the 200-day moving average of $91.76. For the week, it rose 2.4 percent. Rising stockpiles of crude in the United States, the world's largest oil consumer, also pressured prices on Friday. U.S. RBOB gasoline fell 1.3 percent while heating oil slipped 0.4 percent after the Energy Information Administration's (EIA) weekly report showed gasoline inventories rising 2.57 million barrels last week and distillate stocks 4.57 million barrels. Gold fell more than 1 percent but rebounded from a 4-1/2 month low after some investors in the bullion market viewed the U.S. jobs report for December as bearish, and suggesting that the Fed may retain its monetary stimulus in the near term. "Investors think that the payroll report is still not enough to change the Fed's accommodative policy, which is a positive for gold," said Howard Wen, metals analyst at HSBC. The spot price of bullion was down 1.3 percent at $1,641.70 an ounce, after falling to $1,625.79, its lowest price since late August. It was headed for a sixth week of losses, which would be its longest losing streak since June 1999.
Prices at 1:19 p.m. EST (1819 GMT)
LAST NET PCT CHG CHG US crude 92.98 0.06 0.1% Brent crude 111.23 -0.91 -0.8% Natural gas 3.277 0.079 2.5%US gold 1646.90 -27.70 -1.7% Gold 1645.94 -17.01 -1.0% US Copper 369.35 -2.35 -0.6% LME Copper 8106.00 -58.00 -0.7% Dollar 80.600 0.213 0.3%US corn 681.50 -7.75 -1.1% US soybeans 1387.25 -15.75 -1.1% US wheat 741.00 -14.50 -1.9%US Coffee 146.50 0.00 0.0% US Cocoa 2220.00 -36.00 -1.6% US Sugar 18.84 -0.26 -1.4%US silver 29.850 -0.870 -2.8% US platinum 1557.30 -21.50 -1.4% US palladium 687.50 -9.65 -1.4%