Gold hits lowest level since Aug Oil prices diverge

LONDON, Dec 22, (AFP): Commodity markets were hit this week in the run-up to Christmas, as hopes faded for a deal to avert the “fiscal cliff” of tax rises and spending cuts that could send the world’s biggest economy spinning into recession, analysts said. Unless the political deadlock in Washington is broken, the fiscal cliff measures will be implemented in the United States — a major consumer of many raw materials — on January 1. Commodity markets had won support last week after the US central bank launched more stimulus measures. But data showed Thursday that the American economy grew 3.1 percent in the third quarter, faster than previously estimated, dampening hopes of more stimulus.

Oil: Prices diverged this week, but saw steep losses on Friday as sentiment was rocked by intensifying fiscal cliff concerns in top crude consumer the United States.
Prices had rallied Tuesday amid indications Washington was inching closer to resolving the budget impasse, after US President Barack Obama met with top Republican lawmaker John Boehner in the latest effort to broker an agreement.
The market also rose on Wednesday following news of a decline in US petroleum inventories, which indicated strong demand.
Crude futures paused on Thursday but dived by more than a dollar on Friday amid the political stalemate in Washington. “The market is still weighing the result of the fiscal cliff negotiations,” said Andy Lipow of Lipow Oil Associates.
A Republican plan to let tax breaks expire on US millionaires collapsed late Thursday when it failed to earn enough party support.


Early Friday, Republican leaders said they were not walking away from negotiations but a compromise remains elusive, and investors remain on edge.
The measure had been blasted by Obama’s Democrats as a diversionary tactic that would never have passed in the Senate, where they hold a majority.
On London’s Intercontinental Exchange, Brent North Sea crude for February dipped to $108.88 a barrel from $109.00 last week for the January contract.
Precious metals: Gold struck the lowest level since August, hit also by profit-taking ahead of the year-end, dragging other precious metals lower.
“Fiscal cliff talks continue to dominate headlines, with talks taking a real turn for the worse after House Republican leaders cancelled the vote on higher taxes for richer Americans,” added CMC Markets analyst Michael Hewson.
“Markets recovered slightly as (US) durable goods orders increased 0.7 percent in November, while the October number was also revised higher, but in reality did little to repair the damage already done in Washington.”


By late Friday on the London Bullion Market, gold slid to $1,651.50 an ounce from $1,696.25 a week earlier. Silver dropped to $29.89 an ounce from $32.52.
On the London Platinum and Palladium Market, platinum declined to $1,533 an ounce from $1,613.
Palladium fell to $675 an ounce from $700.

Base metals: Base or industrial metals mainly fell as traders also eyed US woes.
Three-month aluminium slipped to $2,070 per tonne from $2,120.
Three-month lead reversed to $2,291 a tonne from $2,300.
Three-month tin rose to $23,300 a tonne from $23,100.
Three-month nickel decreased to $17,540 a tonne from $17,819.
Three-month zinc eased to $2,065 a tonne from $2,083.


Cocoa: Prices registered more multi-month lows as sentiment was weighed down by rising supplies.
On New York’s NYBOT-ICE exchange, cocoa for March decreased to $2,325 a tonne from $2,432 a week earlier.

Coffee: Coffee prices declined on the back of upbeat supply forecasts, particularly from major producer Brazil.
On LIFFE, Robusta for March weakened to $1,881 a tonne from $1,899 a week earlier.


Sugar:
Prices nudged higher, rebounding slightly from recent losses.
On NYBOT-ICE, the price of unrefined sugar for March increased to 19.16 US cents a pound from 18.67 cents the previous week.
Grains and soya: Maize, wheat and soya prices all fell.
January-dated soyabean meal — used in animal feed — decreased to $14.27 a bushel from $14.96.
Wheat for March eased to $7.94 a bushel from $8.14.


Rubber:
Prices firmed on the back of tight supplies, with the key producing region in South Thailand facing heavy rain.
The Malaysian Rubber Board’s benchmark SMR20 ended the week at 289.75 US cents a kilo, up from 285.85 cents the previous week.

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