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COMMODITIES-Gold at 2-week high; wheat down on GMO worry
May 30, 2013 / 10:33 PM / 4 years ago

COMMODITIES-Gold at 2-week high; wheat down on GMO worry

* Gold up 1.5 pct as US quarterly growth disappoints
    * Copper up nearly 1 pct, biggest rise in a week
    * Oil settles mixed, arabica coffee plumbs 3-year lows

    By Barani Krishnan
    NEW YORK, May 30 (Reuters) - Gold rose on Thursday, hitting
2-week highs, as investors speculated that weaker-than-expected
U.S. growth in the first quarter would prompt the Federal
Reserve to hold on to its monetary stimulus.
    A day earlier, most commodities fell on fear the Fed might
stop its stimulus program.
    Copper had its biggest gain in a week on bets of improving
demand from No. 1 buyer China, and as output from top producer
Chile declined from a year ago due to worker strikes and other
production issues.
    Oil prices  settled mixed and futures of
grains and other crops mostly fell, pressuring the broader
commodities complex lower.
    Arabica coffee continued its downtrek to 3-year lows
. In grains markets, wheat futures fell on concerns about
the fate of U.S. wheat exports following the discovery of an
unapproved genetically modified (GMO) wheat variety in the U.S.
Pacific Northwest (PNW).
    The 19-commodity Thomson Reuters-Jefferies CRB index
 closed slightly lower.
    The spot price of gold rose over 1.5 percent to a
two-week high above $1,417 an ounce on safe-haven buying after
data showed the U.S. economy grew at a slower pace than
initially expected in the first quarter. Separately, weekly
initial jobless claims unexpectedly rose last week and pending
home sales increased less than expected. 
    Selling of gold has been sharp and sporadic over the past
few weeks on speculation over what the Fed was likely to do if
the patchy U.S. economic recovery seen this year gathers steam.
The central bank has committed to buying $85 billion of U.S.
government bonds a month under its stimulus plan.
    On Wednesday, most commodities fell after U.S. stocks hit
record highs on talk the Fed might pare its monetary stimulus
amid an improving domestic economy.
    Gold fell more than 1 percent in a single sesson last
Tuesday after Fed Chairman Ben Bernanke said a decision to
reduce the central bank's bond-buying program could be made in
the "next few meetings." The market rebounded the next day after
James Bullard, another key official of the Fed, said he did not
think the stimulus plan was "that close" to an end.
    "The market has realized that any change in policy will be a
long ways off and most likely a much smaller change than a
complete shut-off of the liquidity pump," said Sean McGillivray,
head of asset allocation at Great Pacific Wealth Management a
Grants Pass, Oregon. 
    In copper, the three-month futures contract on the London
Metal Exchange closed at $7,320, almost 1 percent up,
reversing Wednesday losses. 
    The rebound came after news that some of China's largest
copper smelters had recently been forced to shut some units due
to shortages of scrap, cutting copper output in the region.
    "People are underestimating the pace of growth of demand in
China; on the copper side of things we think demand is holding
pretty well and the tightness in the scrap market in China is
also quite notable," said analyst Dan Smith of Standard
Chartered in London. 
    Copper was also boosted by data showing that April copper
production in Chile dropped by 1.2 percent from the
same month a year before, due to strikes, production line
problems and lower ore grades in some deposits. 
    Wheat for July delivery closed down half a percent at
$6.98-3/4 a bushel in Chicago trade.
    The drop followed Japan's cancellation of a tender to buy
western white wheat after the U.S. government announced on
Wednesday it had found GMO wheat sprouting on an Oregon farm.
Japan is the top importer of U.S. wheat. 
    "At this point, the key feature might be whether this is an
isolated incident that is confined to the PNW," AgriVisor
analyst Dale Durcholz said, referring to wheat of the U.S.
Pacific Northwest variety.
    "The concern is going to be whether the genetics might have
inadvertently entered the 'seed' pipeline since 2005 when test
plots of this wheat were produced," Durcholz added. 
 Prices at 6:02 p.m. EDT (2202 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    93.61     0.00   0.0%    1.9%
 Brent crude                102.24    -0.19  -0.2%   -8.0%
 Natural gas                 4.023    0.000   0.0%   20.1%
 US gold                   1411.50    20.20   1.5%  -15.8%
 Gold                      1412.85    -0.40   0.0%  -15.6%
 US Copper                    3.32     0.02   0.6%  -99.1%
 LME Copper                7317.00    52.00   0.7%   -7.7%
 Dollar                     83.012   -0.648  -0.8%    8.1%
 US corn                    654.25   -10.50  -1.6%   -6.3%
 US soybeans               1495.75    -6.00  -0.4%    5.4%
 US wheat                   698.75    -4.00  -0.6%  -10.2%
 US Coffee                  125.85    -1.75  -1.4%  -12.5%
 US Cocoa                  2211.00     1.00   0.0%   -1.1%
 US Sugar                    16.65    -0.02  -0.1%  -14.7%
 US silver                   0.227    0.002   1.1%  -99.2%
 US platinum               1482.70    29.70   2.0%   -3.6%
 US palladium               758.00    10.20   1.4%    7.8%

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