* Funds initiate short position in gold, piling on losses
* Bullion prices fall to lowest since early July
* Crude future up on better economic outlook, supply worries
NEW YORK, Dec 3 (Reuters) - Gold and silver prices fell sharply on Monday as better-than-expected U.S. manufacturing data prompted funds to boost their bearish bets, while crude oil futures climbed more than 1 percent on economic hopes. The precious metals' drop marked a sharp contrast to the rest of the commodity complex and other asset classes. While based metals were dragged lower by weaker copper prices, agricultural commodities were mostly mixed. The Thomson Reuters/Core Commodity CRB index inched down less than 0.1 percent, largely weighed down by declines in precious metals. Bullion's losses quickened after data showed the U.S. manufacturing sector expanded last month at its fastest pace in 2-1/2 years, while hiring also accelerated. "A lot of momentum-driven and institutional investors are piling on gold's decline by short selling it," said Jeffrey Sica, chief investment officer at Sica Wealth Management with over $1 billion in client assets. Spot gold fell 2.7 percent to $1,218.46 by 4:05 p.m. EST (2105 GMT), its biggest one-day drop since Oct. 1. Bullion ended November down 5.4 percent, its biggest monthly decline since June and its third consecutive month of losses. U.S. Comex gold futures for February delivery settled down $28.50 at $1,221.90 an ounce. Silver fell 4.2 percent to $19.12 an ounce. Three-month copper on the London Metal Exchange also closed down 1.1 percent at $6,975 a tonne on Fed tapering fears.
CRUDE, ENERGY HIGHER Among energy commodities, Brent crude rallied and hit its highest price since September, boosted early by strong Chinese and the U.S. manufacturing data, then rising further on reports that several Russian cargo cancellations had tightened supply.
Volume surged and Brent extended its gains by nearly $1 a barrel just before noon, as Russian oil companies Lukoil and Rosneft canceled loadings of mid-December two Urals cargoes, tightening supplies, traders said. Brent crude for January rose $1.76 to settle at $111.45 a barrel, after hitting a session high of $112.34. U.S. crude rose $1.10 to settle at $93.82 a barrel. Among agricultural commodities, U.S. soybean futures dropped 1.1 percent, their biggest decline in more than two weeks, weighed down by profit-taking and weakness in the soymeal market. Corn futures, however, rose on bargain hunting.
Prices at 4:05 p.m. EST (2105 GMT)
LAST/ NET PCT YTD CLOSE CHG CHG CHG US crude 93.86 1.14 1.2% 2.2% Brent crude 111.46 1.77 1.6% 0.3% Natural gas 3.988 0.034 0.9% 19.0% US gold 1221.90 -28.50 -2.3% -27.1% Gold 1218.46 -33.53 -2.7% -27.2% US Copper 3.18 -0.02 -0.7% -12.9% LME Copper 6975.00 -80.00 -1.1% -12.1% Dollar 80.913 0.233 0.3% 5.4% CRB 274.752 -0.130 -0.1% -6.9% US corn 416.50 1.25 0.3% -40.4% US soybeans 1321.25 -15.25 -1.1% -6.9% US wheat 649.75 -5.25 -0.8% -16.5% US Coffee 109.90 -0.95 -0.9% -23.6% US Cocoa 2813.00 25.00 0.9% 25.8% US Sugar 16.97 -0.18 -1.0% -13.0% US silver 19.289 19.089 1.5% -36.2% US platinum 1346.80 -22.00 0.0% -12.5% US palladium 713.40 -6.25 -0.9% 1.4%