NEW YORK, Jan 9 (Reuters) - Commodity prices from natural gas to sugar tumbled broadly on Thursday, sending a key commodities gauge to 18-month lows, after worries that an improving U.S. economy could lead to higher interest rates and cause faster withdrawal of stimulus money than thought. Analysts said investors turned cautious ahead of U.S. jobs data due on Friday, which analysts said could further strengthen the Federal Reserve's case in rolling back monetary easing programs that have kept rates at near zero levels. Annual rebalancing of the most-closely followed commodity indexes, which called for reductions in allocations for U.S. natural gas and crude oil, also weighed to an extent on prices.
Investors were expecting the U.S. Labor Department to report that non-farm payrolls increased by 196,000 last month after gaining 203,000 in November, a Reuters poll of economists said.
Some were expecting the first Fed rate hike to occur as early as the April 2015 meeting of the central bank versus earlier expectations of a hike after July 2015. "If the U.S. non-farm payrolls data does beat expectations, then there is a strong possibility that the new regime in the Federal Reserve bank could take more aggressive steps towards tapering," said Naeem Aslam, who watches the market copper for Ava Trade. Tapering refers to the Fed's cutback in monetary easing. The central bank has already decided to trim its monthly stimulus to $75 billion from $85 billion starting this month. The Thomson Reuters/Core Commodity CRB index, a bellwether for commodities, fell nearly 1 percent to its lowest level since the end of June 2012. Fifteen of the 19 commodities on the CRB settled in the negative, with natural gas being the largest loser after a 5-percent drop. Silver had the biggest gain of the day, 0.7 percent. Gas futures slumped in New York after forecasts for imminent warmer temperatures across the United States ended a powerful gas rally brought on by bitter cold weather that spiked up demand for heating. Front-month February gas futures on the New York Mercantile Exchange fell 21 cents, or 5 percent, to close at $4.005 per million British thermal units. Prices dipped to a low of $3.999 during the session for the first time since the beginning of December. Gas aside, nearly 10 other commodities posted significant declines of between 1 and 2 percent. Raw sugar was among the bigger losers of the day, hitting a 3-1/2 year low as it extended a long-term downtrend on chart-based selling, currency pressure, and excess supplies.
March raw sugar on ICE Futures U.S. finished down 1.7 percent at 15.48 cents a lb, extending Wednesday's 2 percent drop. Its bottom for the day 15.41 cents a lb, a bottom not seen since mid-2010. Aluminium was another major loser, finishing down 1.5 percent at $1,749 a tonne after plumbing an early December low at $1,751.25. Among other key commodities, Brent crude oil slipped 0.7 percent to $106.39 a barrel after news that production was restarting at a key North Sea oilfield. Gold rose a modest 0.3 percent on short-covering after straight two days of losses, trading at above $1,225 an ounce. Prices at 4:51 p.m. EST (2151 GMT)
LAST/ NET PCT CLOSE CHG CHG US crude 92.33 0.00 0.0% Brent crude 106.44 -0.71 -0.7% Natural gas 4.005 -0.211 -5.0% US gold 1229.40 3.90 0.3% Gold 1227.44 -0.10 0.0% US Copper 3.30 -0.04 -1.3% LME Copper 7213.00 -131.50 -1.8% Dollar 80.921 -0.101 -0.1% CRB 272.294 -2.562 -0.9% US corn 412.00 -5.00 -1.2% US soybeans 1296.25 -4.50 -0.4% US wheat 584.25 -4.50 -0.8% US Coffee 119.35 -1.55 -1.3% US Cocoa 2684.00 -16.00 -0.6% US Sugar 15.48 -0.26 -1.7% US silver 19.683 19.488 1.6% US platinum 1417.70 5.50 0.0% US palladium 736.50 -1.80 -0.2%
(Editing by Marguerita Choy)