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COMMODITIES-Gold tumbles on firm US data; natgas up again on cold

Barani Krishnan
Thursday, 12 Dec 2013 | 4:58 PM ET

NEW YORK, Dec 12 (Reuters) - Gold tumbled 2 percent on Thursday as upbeat U.S. retail sales data stoked expectations of a cut soon in the Federal Reserve's stimulus program, and natural gas prices rose for a fourth straight day as colder weather gripped the United States. Coffee and silver were among other commodities that posted major price moves. Robusta coffee, grown primarily in Vietnam and traded in London, hit a near 3-1/2 month high after a drawdown in exchange-certified inventories of the beverage commodity.

Silver fell 4 percent in what traders described as typical of the precious metal that tends to post exaggerated moves in sympathy with gold prices. The losses in gold, silver and other markets such as aluminum, gasoline, soybeans and corn weighed on the broader commodity complex, tracked by the Thomson Reuters/Core Commodity CRB index.

The CRB fell 0.3 percent after Reuters data showed losses of 1 percent or more in eight of the 19 markets it tracks. The spot price of gold fell 2 percent to $1,226.86 an ounce by 4:20 p.m. EST, extending Wednesday's 0.7 percent drop. It was the biggest two-day slide in the precious metal since Oct. 1. The selloff in gold came after data showed U.S. retail sales rose solidly in November. It was another sign of a strengthening economy after last week's better-than-expected U.S. nonfarm payrolls and GDP data, which could encourage the Fed to ratchet back stimulus efforts. A two-year U.S. budget deal also cleared a procedural hurdle in the House of Representatives on Thursday, with passage expected. A budget deal should also move the Fed toward tapering its $85 billion-a-month bond-buying program. "With the possibility of the budget debate behind us, it could bring to the forefront that the Fed is one step closer to tapering at its December meeting next week," said David Meger, director of metals trading at Chicago futures brokerage Vision Financial Markets. The front-month contract for natural gas settled up 7.2 cents at $4.409 per million British thermal units, after a weekly government storage report showed inventories fell more than normal. Prices earlier rose to $4.434, the highest since May and only a penny off a two-year record. A boom in drilling for natural gas in shale formations over the last decade has pushed gas output in the United States to record highs, driving prices in 2012 to below $2 per mmBtu, their lowest level in 10 years. Since then, prices have rebounded but have often balked around the $4 mark. But some technical traders said the rally may not last for long, noting the market was at its most "overbought" in nearly 10 years. Since December began, gas futures have gained more than 9 percent.

Prices at 4:32 p.m. EDT (2132 GMT)

LAST/ NET PCT YTD CLOSE CHG CHG CHG US crude 97.36 -0.08 -0.1% 6.0% Brent crude 108.52 -1.18 -1.1% -2.3% Natural gas 4.409 0.072 1.7% 31.6% US gold 1224.90 -32.30 -2.6% -26.9% Gold 1227.00 -24.35 -1.9% -26.7% US Copper 3.30 0.00 0.0% -9.8% LME Copper 7226.00 6.00 0.1% -8.9% Dollar 80.165 0.272 0.3% 4.4% CRB 280.158 -0.859 -0.3% -5.0% US corn 428.25 -3.00 -0.7% -38.7% US soybeans 1323.75 -20.25 -1.5% -6.7% US wheat 622.50 -7.75 -1.2% -20.0% US Coffee 111.30 1.60 1.5% -22.6% US Cocoa 2787.00 32.00 1.2% 24.6% US Sugar 16.30 -0.21 -1.3% -16.5% US silver 19.453 19.249 1.5% -35.6% US platinum 1364.40 -20.80 0.0% -11.3% US palladium 720.25 -18.30 -2.5% 2.4%

(Editing by Jim Marshall)