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NEW YORK — Commodity prices fell nearly across the board Thursday as traders appeared to sell their holdings and lock in profits before the new year.
Oil, gold and grain prices all fell, and the decline didn't seem to be based on any one economic factor or piece of news, said George Gero, vice president of global futures for RBC Wealth Management in New York. Rather, many traders seemed eager to sell higher-priced contracts to book their gains.
A key reason to sell commodities before Dec. 31 is a tax rule called "mark to market," which requires investors to pay a tax on all commodity profits they reap by the end of the year, even if they still own those commodities, Gero said. That gives traders an incentive to sell their holdings now, rather than be taxed on profits that might disappear later if the commodities lose value.
"You might as well sell if you have to pay the tax anyway," Gero said.
Gold for February delivery fell $7.60 to settle at $1,405.90 an ounce. Silver contracts for March delivery lost 19.1 cents to $30.513 an ounce.
Industrial metals also fell, except for copper which rose slightly.
January palladium fell $7.20 to settle at $786.20 an ounce and December platinum lost $9.90 to close at $1,744.30 an ounce.
Copper for March delivery rose 5.1 cents to settle at $4.3625 a pound.
Energy prices fell after the government said oil and natural gas supplies fell less than expected last week.
The Energy Department's Energy Information Administration weekly supply report said oil supplies declined by 1.3 million barrels last week. A drop in supplies often supports higher prices, but analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., thought the drop would be bigger — around 3.2 million barrels.
Investors worried that the report showed demand for energy was not continuing to pick up, despite positive economic news. The Labor Department on Thursday said the number of people applying for unemployment benefits fell to 388,000, the lowest level in almost two and a half years.
Benchmark oil for February delivery fell $1.28 cents to settle at $89.84 a barrel on the New York Mercantile Exchange.
In other Nymex trading in January contracts, heating oil fell 3.61 cents to settle at $2.4854 a gallon, gasoline rose 0.14 cents to $2.3918 a gallon. Natural gas for February delivery rose 5.1 cents to $4.338 per 1,000 cubic feet.
In other trading, grains and soybeans were also down.
March wheat fell 14.5 cents to settle at $7.8475 a bushel. March corn fell 8 cents to $6.16 a bushel and March soybeans fell 1 cent to $13.76 a bushel.
