Daily Commodities Analysis: Oil and Gold

CL2G

Oil fell, paring a third annual increase, as Chinese manufacturing contracted for a second month in December, spurring concern that demand from the world’s second-largest crude-consuming country may slow. Futures dropped 0.8 percent after the report by HSBC Holdings Plc and Markit Economics also showed China’s exports fell for the first time in three months as Europe’s debt crisis reduced orders. Oil advanced 8.2 percent in 2011 as a collapse in Libyan exports cut supply, U.S. stimulus measures revived the economy and Iran threatened to close the Strait of Hormuz. Crude for February delivery slid 82 cents to settle at $98.83 a barrel on the New York Mercantile Exchange. Prices slipped 1.5 percent this month and 0.9 percent this week. Oil surged 25 percent in the three months ended today, the biggest quarterly gain since the period ended June 30, 2009. A deeper slowdown in China, the world’s second-biggest economy, would impair a global expansion that is already faltering because of Europe’s austerity measures. China used 9.06 million barrels a day of oil in 2010, or 10 percent of world’s total consumption.



GOLD

Gold gained after reports that Iran produced its first nuclear fuel rod, spurring investors to buy the precious metal as a haven. Gold for immediate delivery advanced 0.2 percent to $1,566.37 an ounce. Gold reserves increased in November at Belarus, Turkey, Tajikistan, Macedonia, Mauritius and Morocco, and declined in Mexico. Turkey’s holdings increased to 5.758 million ounces from 4.429 million ounces and Mexico’s declined to 3.413 million ounces from 3.417 million ounces in October. While Morocco’s holdings were 710,000 ounces in November compared with 708,800 ounces in October. Gold raised the most this month, capping an 11th straight annual advance, on speculation that demand will climb from jewelers and investors. Gold fell 4.7 percent in the previous six sessions to the lowest since July 7 as the dollar gained against the euro, curbing demand for the metal as an alternative investment. Gold futures for February delivery climbed 1.7 percent to settle at $1,566.80 an ounce.