COMMODITIES-Gold dives on US debt deal chance; supply weighs on oil
NEW YORK, Oct 11 (Reuters) - Gold hit a 3-month low on Friday as signs of a possible resolution to the U.S. budget impasse sparked an investor exodus from safe-haven assets, and oil prices fell as tensions over Middle East crude supplies eased. The dollar traded near a two-week peak against the yen after Republicans in the U.S. Congress met with President Barack Obama on Thursday to offer an extension of the government's borrowing authority for several weeks, temporarily putting off a default. Obama also pushed to reopen government operations that have been shut since Oct. 1. The stronger dollar weighed on gold, oil and a host of other commodities priced in the U.S. currency. The Thomson Reuters-Jefferies CRB index, a bellwether for commodities, was down 0.6 percent by 10:25 a.m. EDT (1425 GMT), with 10 of the 19 markets tracked by the index trading in negative territory. U.S. gold futures fell 2.4 percent in heavy volume, the second largest loss on the CRB after silver's 3 percent drop. The benchmark December gold futures on New York's COMEX was down more than $32 to below $1,265 an ounce, after plumbing a $1,242.10 bottom, the lowest since July 10. Part of the decline was in catch up to Thursday's tumble in the spot price of gold. Spot gold fell 1.6 percent on in the previous session, while December gold only lost 0.8 percent. On Friday, the spot price was down another 1.6 percent. Traders said almost 30,000 contracts of December gold changed hands over a 10-minute period on Friday, accounting for some of the intense trading for the week. "Physical buying is fairly non existent at these levels, funds are staying clear and even the most diehard bulls are having problems coming up with a reason to buy gold, given its totally lacklustre performance as of late," Marex Spectron said in a note. "As I have said before, once the U.S. resolves its problems, which it will, we head lower." The gold holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 0.2 percent, or 1.80 tonnes, to 896.38 tonnes on Thursday. That marked a fresh four-year low. The ETF, seen as a good measure of gold investor sentiment due to the amount of bullion it holds, has seen outflows of about 400 tonnes this year. Oil's benchmark Brent crude was down about 0.4 percent, after Thursday's near 3 percent rally fueled by optimism about an U.S. budget deal which would be positive for oil. Brent traded at around $111.40 a barrel after the International Energy Agency said non-OPEC supply would rise by an average of 1.7 million barrels per day (bpd) in 2014, the highest annual growth since the 1970s. Copper's losses were modest but for the week, the base metal was on track to its sharpest drop in a month after a slump on Thursday triggered by fear that political wrangling over the debt crisis might actually force the United States into its first default. Benchmark copper on the London Metal Exchange CMCU3, was untraded in official rings but was bid at $7,156 from a close at $7,145 on Thursday, when it gained 0.6 percent. For the week, it was headed for a drop of 1.4 percent.
Prices at 10:54 a.m. EDT (1454 GMT)
LAST NET PCT YTD CHG CHG CHG US crude 101.77 -1.25 -1.2% 10.8% Brent crude 111.21 -0.59 -0.5% 0.1% Natural gas 3.777 0.054 1.5% 12.7% US gold 1266.10 -30.80 -2.4% -24.4% Gold 1266.01 -19.56 -1.5% -24.4% US Copper 3.25 0.01 0.2% -11.1% LME Copper 7157.50 12.50 0.2% -9.8% Dollar 80.343 -0.074 -0.1% 4.7% CRB 286.041 -1.334 -0.5% -3.0% US corn 433.50 -4.75 -1.1% -37.9% US soybeans 1269.50 -18.50 -1.4% -10.5% US wheat 688.50 3.00 0.4% -11.5% US Coffee 115.05 0.65 0.6% -20.0% US Cocoa 2740.00 11.00 0.4% 22.5% US Sugar 18.86 0.14 0.8% -3.3% US silver 21.550 -0.003 -1.4% -28.7% US platinum 1378.10 -14.20 -1.0% -10.4% US palladium 711.35 -1.20 -0.2% 1.1%