Gold futures fell the most in six weeks after Venezuela offered to mediate a resolution to the crisis in Libya. Silver had the biggest drop since late January.
The Arab League said it is weighing an offer by Venezuelan President Hugo Chavez to mediate the civil conflict in Libya. Yesterday, gold rose to a record of $1,441 an ounce as turmoil in the Middle East, the world’s biggest oil-producing region, boosted demand for an investment haven.
“Peace, if it happens, may be bearish for gold and silver,” said Dennis Gartman, an economist and the editor of the Suffolk, Virginia-based Gartman Letter. “It is time again to head to the sidelines in gold and precious metals.”
In other markets, cotton rose for the fifth straight session after a report showed increased export demand from the U.S., the world’s largest shipper. Crude oil fell from a 29- month high. The UBS Bloomberg Constant Maturity Commodity Index advanced 0.3 percent to 1,788.22. Earlier, the gauge reached 1,791.25, extending a rally to a record.
Gold futures for April delivery fell $21.30, or 1.5 percent, to settle at $1,416.40 on the Comex in New York, the biggest slide since Jan. 20. The metal has gained 24 percent in the past year.
Silver futures for May delivery fell 50.8 cents, or 1.5 percent, to $34.327 an ounce, the biggest drop since Jan. 25. Yesterday, the metal reached $34.975, the highest since March 7, 1980. That year, the price climbed to a record of $50.35. The commodity has almost doubled in the past 12 months.
Cotton
Cotton for May delivery advanced 5.1 cents, or 2.5 percent, to settle at $2.057 a pound on ICE Futures U.S. in New York. Earlier, the price surged by the exchange limit of 7 cents. The most-active contract has jumped 16 percent in five sessions after falling 5.5 percent last week.
U.S. sales surged 56 percent to 403,341 bales in the week ended Feb. 24 from a week earlier as shipments increased to China, Turkey and Bangladesh, the U.S. Department of Agriculture said today. Prices have more than doubled in the past 12 months as global supplies trailed demand.
“China is busy trying to book as much cotton as it can,” said Mike Stevens, an independent trader in Mandeville, Louisiana. “These numbers are terrific and show how much demand was waiting for prices to dip.”
Crude Oil
Oil futures for April delivery slid 32 cents, or 0.3 percent, to $101.91 a barrel on the New York Mercantile Exchange.
The Associated Press reported that Libyan army deserters secured oil facilities in the rebel-held port of Brega on the Gulf of Sidra. Forces loyal to Muammar Qaddafi briefly seized, then lost control of, Brega yesterday.
“There are people attempting to come up with some kind of compromise that would allow some kind of peace settlement, and that’s definitely a bearish sign,” said Michael Lynch, the president of Strategic Energy & Economic Research in Winchester, Massachusetts. The government’s failure to hold Brega “removed any thought that there would be any damage to the oil exports,” he said.
Commodities settled as follows:
April gold down $21.30 to $1,416.40 an ounce May silver down 50.8 cents to $34.327 an ounce April platinum down $26.30 to $1,833 an ounce June palladium down $7.85 to $814.80 an ounce
Livestock: April live cattle up 2 cents to $1.142 a pound August feeder cattle up 0.875 cent to $1.344 a pound April lean hogs up 0.55 cent to 88.8 cents a pound
Grains: May soybeans up 17.75 cents to $14.12 a bushel May corn up 15.25 cents to $7.3675 a bushel May wheat up 12.25 cents to $8.235 a bushel May rice up 0.085 cent to $14.10 per 100 pounds May oats up 4 cents to $3.94 a bushel
Food and Fiber: May coffee up 5.2 cents to $2.7475 a pound May cocoa up $69 to $3,733 a metric ton May cotton up 5.1 cents to $2.057 a pound May sugar up 0.21 cent to 30.59 cents a pound May orange juice down 1.75 cents to $1.7455 a pound
Energy: April crude oil down 32 cents to $101.91 a barrel April natural gas down 4 cents to $3.778 per million British thermal units April heating oil down 0.84 cent to $3.0493 a gallon April gasoline down 0.33 cent to $3.0262 a gallon
Others: May copper down 0.8 cent to $4.49 a pound May lumber up $10 to $315.20 per 1,000 board feet
Source: Bloomberg By
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