Commodities fell to a four-year low on speculation abundant supplies and slowing economic growth outside of the U.S. will curb demand for raw materials.
The Bloomberg Commodity Index declined 0.9 percent by 4:41 p.m. in London to the lowest since June 2010. Brent oil traded at the cheapest since 2012, wheat and soybeans retreated to four-year lows and gold slumped to a seven-month low.
Weak economic growth in Europe and Japan is leading to lower energy prices and interest rates in the U.S. at a time when the U.S. corn crop is a record high and U.S. oil production is poised to be the most in 45 years. The euro-area recovery stalled in the second quarter and Japan contracted by the most in more than five years. Food prices fell to the lowest in almost four years as costs of milk and and cooking oils tumbled, the Food & Agriculture Organization said today.
“We have had disappointing growth data,” Kevin Norrish, an analyst at Barclays Plc in London, said today by phone. “Growth now looks a bit less promising and supplies in many commodities are quite robust.”
Brent declined for a sixth day, falling as much as 1.4 percent to $96.72 a barrel, the lowest since July 2, 2012. Copper retreated 0.6 percent to $6,830 a metric ton and wheat fell to the lowest price since July 2010.