COMMODITIES-Gold leads selloff after U.S. shutdown; sugar jumps
NEW YORK, Oct 1 (Reuters) - Gold, copper, crude oil and a number of other commodities fell sharply on Tuesday after the U.S. government's partial shutdown caused investors to sell and discouraged others from buying. Talk that a commodities fund was having to liquidate positions added to the pressure on gold. Gold sank 3 percent as some investors became frustrated at the market's inability to rally after the U.S. government shutdown. The safe-haven metal fell to its lowest in almost two months after a rash of computer-triggered stop-loss sales.
U.S. copper futures fell about 2 percent to a 1-week bottom. Benchmark crude oil out of London closed nearly half a percent lower. The losses put commodities in the spotlight as the dollar <.DXY > was only slightly lower, while stocks on Wall Street were higher.. "Today is the first day of the new month and of the new quarter, and I think that some confidence was undermined by the shutdown," said Mike Turek, a copper trader with Newedge. 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. A rebalancing of commodity positions as the fourth quarter began was cited as another reason for the commodities selloff. The Thomson Reuters-Jefferies CRB index, a closely watched indicator for commodity prices, closed down half a percent, with 14 of the 19 markets on the index settling in negative territory. For the third quarter that ended on Monday, the CRB rose 8 percent, its biggest quarterly gain in a year.
GOLD DOWN ON HEAVY VOLUME The spot price of gold was down almost $40 to below $1,290 an ounce by 3:30 p.m. EDT (1930 GMT), having hit a low of $1,282.59 earlier. U.S. gold futures for December delivery settled down 3 percent at $1,286.10 an ounce on New York's COMEX. Speculation that a troubled fund was trying to exit its gold positions was one reason for bullion's plunge, which occurred on the back of heavy trading. Volume for gold futures on COMEX was about 20 percent above the 30-day average, 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 option. In copper, the three-month on the London Metal Exchange fell to $7,147 a tonne, the lowest in a week. It was last bid at $7,198 against Monday's close of $7,302. In New York, COMEX copper for December settled down 1.5 percent at $3.274 a lb. 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 AT MID-MAY HIGHS Sugar was one of the few commodities that rose, hitting highs last seen in mid-May, despite a large delivery of the sweetener. U.S. raw sugar for March closed up 1 percent at 18.32 cents a lb on ICE Futures US. The rally came after news that global agribusiness group Louis Dreyfus Commodities had bought almost 1.5 million tonnes of raw sugar delivered against ICE's expired October contract, the biggest in at least 24 years. A London-based sugar broker initially thought the big delivery was bearish to the market, raising questions on why a single merchant would want so much of sugar. But other traders said the deal signaled Louis Dreyfus' confidence that it could find homes for its purchase. "For somebody to take a lot of delivery, you would assume they have a place to put that," said Michael McDougall, senior vice-president at Newedge.
Prices at 3:50 p.m. EDT (1950 GMT)
LAST/ NET PCT YTD CLOSE CHG CHG CHG US crude 101.90 -0.43 -0.4% 11.0% Brent crude 107.77 -0.60 -0.6% -3.0% Natural gas 3.609 0.049 1.4% 7.7% US gold 1286.10 -40.90 -3.1% -23.3% Gold 1290.25 -36.69 -2.8% -22.9% US Copper 3.27 -0.05 -1.5% -10.4% LME Copper 7199.00 -103.00 -1.4% -9.2% Dollar 80.112 -0.107 -0.1% 4.4% CRB 284.020 -1.521 -0.5% -3.7% US corn 439.00 -2.00 -0.5% -37.1% US soybeans 1268.00 -14.75 -1.2% -10.6% US wheat 681.25 2.75 0.4% -12.4% US Coffee 114.10 0.40 0.4% -20.7% US Cocoa 2634.00 -6.00 -0.2% 17.8% US Sugar 17.48 0.00 0.0% -10.4% US silver 21.124 20.907 1.6% -30.1% US platinum 1381.70 -26.40 0.0% -10.2% US palladium 717.90 -8.25 -1.1% 2.1%