Oil, gold slide but post big monthly gains

By Barani Krishnan

NEW YORK (Reuters) - Oil and gold prices fell again on Friday after Britain refused to back a U.S.-led military strike on Syria, but both markets ended August sharply higher after rallying with other commodities in recent weeks.

Platinum, natural gas and cocoa had some of the biggest monthly gains among raw materials, due to encouraging U.S. economic data and supply concerns.

The 19-commodity Thomson Reuters-Jefferies CRB index, a closely watched indicator for the sector, fell about 1 percent on the day but rose nearly 3 percent for August, its best performance in six months.

Brent crude, the benchmark for oil, gained about 6 percent for the month. Gold, platinum and cocoa rose more than 5 percent each. Natural gas finished about 4 percent higher.

Analysts cautioned that the drop in oil and gold prices over the past two sessions could lead to further declines if planned military action against Syria does not disrupt crude supplies from the Middle East.

They said any move by the U.S. Federal Reserve to taper its economic stimulus programs by next month could also put a dent on commodity prices.

"By early next week, Syrian strike or no strike, we could see investor focus start to shift towards the upcoming Fed meeting where we suspect that the central bank will go through with a limited reduction in its bond buying program," Edward Meir, analyst at INTL FC Stone, wrote in a commentary.

"If our assessment is correct, this should generate a short-lived negative response in most commodity markets."

Brent crude settled down $1.15, or 1 percent, at $114.01 a barrel. For the week, it rose 2.7 percent, while on the month, it was up 5.9 percent.

U.S. crude, the main component on the CRB index, finished at $107.65 a barrel, down 1 percent on the day and week. For the month, it rose 2.6 percent.

Oil prices rallied sharply earlier in the week as the United States pushed for a joint Western strike against the forces of Syrian President Bashar al-Assad which it accused of using chemical weapons on civilians.

On Thursday, prices fell on signs that the strike may be delayed. Prices slid again on Friday after Britain's parliament voted against joining any military action on Syria.

Analysts said traders also trimmed their risk in commodities before the long Labor Day holiday weekend in the United States. A strong dollar also pressured prices for raw materials denominated in the currency, as the greenback hit a four-week high against a basket of major currencies.

In gold, the spot price of bullion traded at around $1,394 an ounce by 3:20 p.m. EDT (1920 GMT), down about 1 percent on the day. For the week, it fell 0.1 percent and for the month, it rose nearly 5.5 percent.

Copper, another important commodity for investors and a raw material for the building and power generation industries, also saw price gains in August, although not as much as that of oil and gold.

Benchmark copper futures in London settled at $7,905 a tonne, up about 3 percent for the month. It fell nearly 1 percent on the day and 3.5 percent on the week after worries about demand from China.

Commodities that posted losses in August include orange juice, which tumbled 5 percent; wheat which fell more than 3 percent and cotton, which slipped 2 percent.

(Editing by David Gregorio)