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Oil, gold fall as eurozone crisis persists

Singapore, September 29, 2011

Crude oil, gold, copper and grains fell in Asian trading on Thursday as worries over approval for the eurozone's expanded rescue fund and Greece's ability to qualify for its next aid package prompted a flight to safe-haven dollar holdings.

The concern sent financial markets lower in the previous session. The Dow Jones industrial average dropped 179.79 points, or 1.61 percent, to 11,010.90. The Standard & Poor's 500 Index lost 2.07 percent.

'There's expectation that there will be concrete measures to ring-fence the troubles in the eurozone,' said Alvin Liew, a senior economist at UOB Research in Singapore. 'A lot has been talked about but no agreement is in place.'     

Investors are eyeing the result of European Union and International Monetary Fund inspectors' visit to Greece to decide whether Athens has done enough to secure a new batch of funds while German Chancellor Angela Merkel worked to defuse a revolt within her government before a vote to enhance the powers of Europe's bailout fund on Thursday.

Spot gold slipped 0.3 percent to $1,602.39 an ounce by 0219 GMT, headed for its biggest monthly decline since October 2008. Prices have fallen 12 percent this month.

Brent crude fell 0.6 percent to $103.24 a barrel on Thursday, declining for a second day after a bigger-than-expected increase in US stockpiles heightened concern that demand may slow. US crude dropped as much as 1.9 percent to $79.69 a barrel and was at $80.77 a barrel at 0156 GMT.

Crude inventories in the United States, the world's biggest oil consumer, increased 1.92 million barrels to 340.96 million in the week to September 23. Analysts polled by Reuters had projected an 800,000-barrel build, on average.

The 19-commodity Reuters-Jefferies CRB index lost 2.5 percent on Wednesday, snapping two days of gains. The index is headed for its biggest monthly decline since October 2008, when the Lehman Brothers collapse sent the index plunging 22 percent as investors fled commodities.

Three-month copper on the London Metal Exchange  dropped 5.87 percent to a session trough of $6,824.75 a tonne on Thursday. The contract collapsed to a 14-month low in the previous session, losing more than 7 percent at one point.

LME copper faces a support at $6,800 per tonne, and may rebound moderately to $7,000 before falling to $6,400, according to Reuters technical analyst Wang Tao. - Reuters




Tags: Oil | Gold | Copper | Commodities | Eurozone |

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