Tags: Commodities | Index | Plunges | July

Commodities Index Plunges to Lowest Level Since July

Monday, 15 Apr 2013 07:15 PM

Commodities tumbled to the lowest level since July, led by precious metals, crude oil and wheat, after economic growth in China, the world’s biggest consumer of metals and energy, missed analysts’ estimates.

The Standard & Poor’s GSCI Spot Index of 24 raw materials dropped 2.3 percent on Monday to 608.83, the lowest settlement since July 10. West Texas Intermediate oil fell below $88 a barrel for the first time this year and gold fell the most since 1980. Silver reached the lowest level in more than two years. Grains also declined.

China’s economy unexpectedly lost momentum in the first quarter, expanding 7.7 percent from a year earlier, the National Bureau of Statistics said. That compares with the 8 percent median forecast in a Bloomberg survey and 7.9 percent in the prior quarter. Reports bolstered speculation that growth in the U.S, the world’s biggest economy, is slowing.

“The China situation is clearly the main reason behind the drop in commodity prices,” said John Kilduff, a partner at Again Capital LLC, a New York energy hedge fund. “Some of the recent economic data here hasn’t been good either. The Empire State Manufacturing Index today and the retail sales numbers on Friday both point to lower demand.”

Manufacturing in the New York region expanded less than projected in April as orders cooled and sales stagnated, another report Monday showed. The Federal Reserve Bank of New York’s Empire State Manufacturing Index declined to 3.1 this month from 9.2 in March. Commerce Department data on April 12 showed that retail sales fell 0.4 percent last month, the most since June.

Crude Prices

WTI crude oil for May delivery declined $2.58, or 2.8 percent, to $88.71 a barrel on the New York Mercantile Exchange, the lowest settlement since Dec. 24. The contract dropped as much as 3.8 percent to $87.86 during trading.

Brent oil for May settlement fell $2.72, or 2.7 percent, to end the session at $100.39 a barrel on the London-based ICE Futures Europe exchange. It was the lowest settlement since July 11. The European benchmark touched $100.02 during trading.

The weak economic data from China “affect potential demand at a time of ample supply,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “It raises the question whether we are going to see a buildup in spare capacity.”

China’s industrial output in March rose 8.9 percent, Monday’s report showed. That compares with the median estimate of 10.1 percent in a Bloomberg survey and a 9.9 percent pace in the first two months combined.

Precious Metals

Gold futures for June delivery dropped 9.3 percent to settle at $1,361.10 an ounce on the Comex in New York, the biggest drop since March 17, 1980. Silver futures for May delivery plunged 11 percent to $23.361 an ounce in New York, the lowest closing price since Oct. 22, 2010.

Copper for delivery in May slid 2.3 percent to $3.273 a pound on the Comex, the lowest settlement since Dec. 15, 2011.

Soybean futures for July delivery declined 1.7 percent to settle at $13.56 a bushel on the Chicago Board of Trade. Corn futures for July delivery dropped 2.1 percent to end the session at $6.28 a bushel. Wheat futures for July delivery slid 2.8 percent to $6.9925 a bushel.

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Commodities tumbled to the lowest level since July, led by precious metals, crude oil and wheat, after economic growth in China, the world's biggest consumer of metals and energy, missed analysts' estimates.
Commodities,Index,Plunges,July
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2013-15-15
Monday, 15 Apr 2013 07:15 PM
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