(Recasts with rally in coffee; updates with settlements in CRB, gold and cocoa)
By Barani Krishnan
NEW YORK, Jan 3 (Reuters) – Gold rose to two-week highs on Friday and coffee and cocoa also rallied while many other commodities fell after a snowstorm slammed the U.S. northeast, keeping traders from their desks and thinning market volumes.
A firmer dollar .DXY also weakened demand for commodities priced in the U.S. currency from holders of the euro EUR=. USD/
U.S. stocks pared gains while bond prices remained modestly higher after Federal Reserve Chairman Ben Bernanke expressed cautious optimism about the economy, saying the central bank will stick to a stimulative policy even as it buys fewer bonds. (Full Story) US/
The 19-commodity Thomson Reuters/Core Commodity CRB index .TRJCRBTR settled down 0.3 percent after a heavy snowstorm and dangerously low temperatures hit the northeastern United States, delaying flights, paralysing road travel and closing schools and government offices. (Full Story)
For the week, the CRB fell 2.7 percent, its worst weekly slide in two months, after factoring in losses in three of the past four trading sessions.
“The outlook for commodities isn’t all that great in 2014, and with the confluence of the snowstorm and back-to-back holidays, it isn’t surprising that we’re seeing a slow trot into the new year,” said Adam Sarhan, president at Sarhan Capital, a New York-based financial advisory.
Gold rose to a two-week high as the precious metal saw fresh buying after hitting a six-month low earlier this week. Weaker global demand for equities since the start of the year also helped bullion recapture some its faded allure as a safe-haven asset.
The spot price of bullion XAU= was up 1 percent at above $1,236 an ounce after hitting $1,238.70 earlier – its highest since Dec. 18. For the week, it rose 2 percent.
Gold has been on the rebound since losing nearly 30 percent in 2013, ending a 12-year bull run, largely due to Fed’s move to unwind its long-running monetary stimulus. GOL/
Analysts, however, cautioned that it was too early in the year to say if bullion would sustain its nascent recovery.
“We need to make a solid move back above the $1,270 area to really rattle the cage,” said Ole Hansen, head of commodity strategy at Saxo Bank. “That would take us above the recent highs and would signal a break of this downtrend that we’ve had since 2012.”
Arabica coffee surged more than percent, its sharpest one-day gain in nearly four months, as speculators covered their short positions.
New York-traded arabica for March delivery KCH4 closed up 4.95 cents, or 4.4 percent, to close at $1.1635 per pound. London-traded robusta coffee also rallied, with the March contract LRCc2 rising $30, or 1.9 percent, to end at $1,644 a tonne.
Cocoa futures rebounded from seven-week lows in the previous session.
New York’s March cocoa CCH4 rose 2.4 percent to $2,699 a tonne.
London’s March cocoa LCCc2 was also up 2.4 percent, at 1,717 pounds a tonne.
Fundamentally, the outlook for cocoa had improved with many traders predicting a sharp tail-off in cocoa arrivals at ports in top growing country Ivory Coast in the coming weeks because of drier than normal weather. SOF/L
Prices at 3:57 p.m. EST (2057 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US crude CLc1 94.20 -1.24 -1.3% 2.6%
Brent crude LCOc1 106.96 -0.82 -0.8% -3.7%
Natural gas NGc1 4.304 -0.017 -0.4% 28.4%
US gold GCG4 1238.60 13.40 1.1% -26.1%
Gold XAU= 1237.21 12.70 1.0% -26.1%
US Copper HGH4 3.36 -0.03 -0.8% -8.1%
LME Copper CMCU3 7315.00 -78.00 -1.1% -7.8%
Dollar .DXY 80.883 0.253 0.3% 5.4%
CRB .TRJCRB 276.530 -0.878 -0.3% -6.3%
US corn Cc1 423.50 3.50 0.8% -39.3%
US soybeans Sc1 1289.25 2.25 0.2% -9.1%
US wheat Wc1 605.75 8.75 1.5% -22.1%
US Coffee KCH4 116.35 4.95 4.4% -19.1%
US Cocoa CCH4 2699.00 63.00 2.4% 20.7%
US Sugar SBH4 16.08 -0.21 -1.3% -17.6%
US silver SIH4 20.211 20.010 1.6% -33.1%
US platinum PLF4 1411.50 9.60 0.0% -8.3%
US palladium PAH4 731.20 0.95 0.1% 4.0%