COMMODITIES-Gold, copper and oil fall after US gov't shuts down
NEW YORK, Oct 1 (Reuters) - Prices for gold, copper, crude oil and a number of other commodities fell on Tuesday after the U.S. government's partial shutdown caused investors to sell and discouraged others from buying. In addition, talk circulated that a commodities fund was having to liquidate positions. The commodity markets were in the spotlight as stocks on Wall Street were higher and the dollar <.DXY > was flat. Gold tumbled about 3 percent to a near two-month low, benchmark copper fell around 2 percent to a 1-week bottom and crude oil lost 1 percent. Speculation that a troubled fund was trying to exit its positions in gold was cited as one reason for bullion's plunge, which occurred on the back of heavy trading. Volume for U.S. gold futures on New York's COMEX stood at about 162,000 lots at around midday, on track to surpass its 30-day average at 163,000, preliminary Reuters data showed. "It's obvious it has to be a fund that is just now forced into liquidation," said Jonathan Jossen, a floor trader in Comex gold options. Selling related to the rebalancing of commodity positions on the first day of the third quarter was also cited as a possible reason. Others said gold fell as traders who had bought bullion earlier as a hedge to the U.S. budget crisis sold on bets that the government shutdown will be resolved quickly. Congress missed a midnight deadline to agree on a spending bill, resulting in up to 1 million U.S. government workers being put on unpaid leave. The spot price of gold fell almost $40 to trade below $1,289 an ounce by 11:58 a.m. EDT (1558 GMT), having hit a low of $1,283.54 earlier. U.S. gold futures for December delivery hovered at around $1,290, versus Monday's settlement of $1,327. Analysts said a close below $1,300 an ounce would be rather bearish for gold's outlook. Gold "saw a little bit of a build-up in August because of due political risks - these risks are now being priced out again", said Tobias Merath, head of commodities and research investment at Credit Suisse. Three-month copper on the London Metal Exchange fell to $7,147 a tonne, the lowest in a week, before trading at around $7,177, down 1.8 percent. Brent crude oil out of Europe's North Sea traded at around $107 a barrel, versus Monday's close of $108.37. On the agricultural front, corn fell to a three-year low and soybeans a six-week low, more because of a U.S. government report showing larger-than-expected grain stockpiles. Sugar was one of the few markets that rose, despite large deliveries on Tuesday. Raw sugar for delivery in March was up half a percent at 18.24 cents a lb on ICE Futures U.S.
The Thomson Reuters-Jefferies CRB index, a closely-watched indicator for commodities, slipped by 0.7 percent with 14 of the 19 markets on the index trading in negative territory. U.S. stocks rose, starting the fourth quarter on a positive note, as market participants viewed any pullback in prices as a buying opportunity. The dollar sharply pared its losses against the euro and yen, putting further pressure on commodities priced in the U.S. currency, after the release of stronger-than-expected U.S. factory data.
Prices at 12:02 p.m. EDT (1602 GMT)
LAST NET PCT YTD CHG CHG CHG US crude 101.37 -0.96 -0.9% 10.4% Brent crude 107.14 -1.23 -1.1% -3.6% Natural gas 3.632 0.072 2.0% 8.4% US gold 1288.70 -38.30 -2.9% -23.1% Gold 1288.20 -38.74 -2.9% -23.1% US Copper 3.27 -0.05 -1.5% -10.5% LME Copper 7198.00 -104.00 -1.4% -9.2% Dollar 80.150 -0.071 -0.1% 4.4% CRB 283.436 -2.106 -0.7% -3.9% US corn 437.50 -4.00 -0.9% -37.3% US soybeans 1264.75 -18.00 -1.4% -10.9% US wheat 678.75 0.25 0.0% -12.8% US Coffee 113.50 -0.20 -0.2% -21.1% US Cocoa 2636.00 -4.00 -0.2% 17.9% US Sugar 18.17 0.03 0.2% -6.9% US silver 20.815 -0.008 -3.9% -31.1% US platinum 1374.60 -33.50 -2.4% -10.7% US palladium 716.60 -10.55 -1.5% 1.9%