COMMODITIES-Up broadly after US GDP data; gold rebounds

Chicago (Dec 20)   Stronger-than-expected U.S. economic growth took commodity markets broadly higher on Friday, including gold which is up after a two-day decline and is still headed for its biggest yearly loss in three decades.

Gold, silver, nickel, gasoline, heating oil, and the softs complex, consisting of coffee , sugar and cocoa, rose over 1 percent each after the robust U.S. quarterly growth data.

The U.S. Commerce Department said the economy grew at a 4.1 percent annual rate in the third quarter, a sharp upward revision from the prior growth estimate of 3.6 percent. The data lifted stock prices on Wall Street and boosted risk appetite in most financial markets.

The better growth number came just days after the Federal Reserve began unwinding its long-running stimulus for the U.S. economy, tapering its monthly asset purchases to $75 billion from $85 billion.

"The fact is that the underlying economies are getting better and that will override any tapering that the Fed does," said Amrita Sen, chief analyst at consultants Energy Aspects.

The spot price of gold was up 1.2 percent at more than $1,200 an ounce by 12:35 p.m. EDT on pockets of physical buying, after hitting a six-month low of $1,185.10.

For the year though, gold was down 28 percent, heading for its largest annual loss since 1981.

"Downside risk still exists for gold as the Fed has only just started to taper ...and people have become very negative towards the metal because there is no sign of inflation," Bullman Asset Management manager Nick Bullman said.