Commodities turn mostly lower on big crude drop

Tag : copper silver

In precious metals, gold fell sharply as the drop in crude pricesreduced demand for inflation hedges.
Gold for August delivery dropped $16 to settle at $962.70 an ounceon the New York Mercantile Exchange after earlier falling as low as$958.20 an ounce.
Other metals also fell sharply. September silver lost 20.8 cents tosettle at $18.805 an ounce on the Nymex, while September copperfell 4.95 cents to settle at $3.6505.
The decline in precious metals came despite word from thegovernment that inflation is accelerating. The Labor Departmentreported Wednesday that consumer prices rose 1.1 percent lastmonth, much worse than had been expected and the second fastestrate of increase in 26 years. It blamed most of the increase onrocketing energy prices.
Precious metals are often bought as a hedge against inflationbecause they're known for holding their value, but the steep dropin oil prices has at least temporarily overshadowed that appeal.
Crude prices fell steeply for a second day after the governmentsaid that U.S. crude and gasoline supplies jump unexpectedly lastweek.
Light, sweet crude for August delivery dropped $4.14 to settle at$134.60 a barrel on the Nymex. Prices fell $6.44 Tuesday in thebiggest one-day drop in dollar terms since the Gulf War.
Other energy prices also fell. August gasoline futures dropped10.54 cents to settle at $3.2794 a gallon on the Nymex, whileAugust heating oil futures slid 7.8 cents to settle at $3.841 agallon.
Practically alone among commodities that posted gains Wednesdaywere grain futures, which turned higher on concerns that badweather forecast in the Midwest next week could slow corndevelopment.
Corn for December delivery rose 10.5 cents to settle at $6.7725 abushel on the Chicago Board of Trade, after earlier rising to$6.79.
Soybeans for November delivery rose 32 cents to settle at $15.48 abushel on the CBOT, while September wheat added 23 cents to settleat $8.34 a bushel.