Gold, silver tumble on fund sales; crude oil rises
Chicago (Dec 3) 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.
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
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.