Commodities Erase 2011 Gain

The Standard & Poor?€™s GSCI Index of 24 raw materials dropped 4.9 percent to settle at 607.49 at 3:57 p.m. in New York, bringing the decline this year to 3.9 percent. Copper fell to a one-year low, and crude oil dropped to the lowest in almost five weeks. Gold, corn and sugar also tumbled.

The Federal Open Market Committee said yesterday that the central bank will replace $400 billion of short-term debt with longer-term Treasuries to spur growth. The dollar rose to a seven-month high against a basket of major currencies, eroding the investment appeal of commodities. China?€™s manufacturing may shrink this month, an index of purchasing managers showed.

?€œThere is concern about the world economy, from issues in China to the FOMC move to stimulate the U.S. economy,?€ Carolyn Farndell, a senior commodity associate at RBC Wealth Management in Minneapolis, said in a telephone interview. ?€œAll that is spilling over, and we?€™re seeing widespread liquidation of commodities.?€

The world economy will expand 4 percent this year and in 2012, the International Monetary Fund said on Sept. 20, cutting forecasts in June for a 4.3 percent gain this year and 4.5 percent in 2012. ?€œGrowth has slowed, and the downside risks are high,?€ Christine LaGarde, the IMF managing director, said today in an interview on Bloomberg Television with Tom Keene.

Equities Slump

The S&P 500 Index of equities slid as much as 4.5 percent today. The Shanghai Composite Index dropped 2.8 percent, extending this year?€™s decline to 13 percent. Manufacturing in China, the largest metal user, may shrink for a third month, the longest contraction since 2009, according to a preliminary index from HSBC Holdings Plc and Markit Economics released today.

Copper futures for December delivery plunged 27.55 cents, or 7.3 percent, to $3.4885 a pound on the Comex in New York. Earlier, the price touched $3.412, the lowest for a most-active contract since Sept. 10, 2010. The metal reached a record $4.6575 in February.

?€œOn the back of the plentiful bearish news and the further rise of risk aversion, it is not surprising that metal prices have come under strong pressure,?€ Commerzbank AG said in a report. The U.S. is the second-biggest copper consumer.

Silver Plummets

Gold futures for December delivery declined $66.40, or 3.7 percent, to $1,741.70 an ounce in New York. Silver futures for December delivery plummeted $3.891, or 9.6 percent, to $36.578 an ounce.

Crude-oil futures for November delivery oil fell $5.41 to $80.51 a barrel on the New York Mercantile Exchange. Earlier, the price touched $79.66, the lowest since Aug. 19.

?€œGlobal crude-oil markets continue to be torn between heightened concerns over the global economic outlook and the continued resilience of fundamentals?€ for petroleum, Goldman Sachs Group Inc. analysts David Greely and Stefan Wieler said in a report.

Agricultural commodities also tumbled. On the Chicago Board of Trade, wheat futures for December delivery fell as much as 5.2 percent, and corn futures for December delivery plunged as much as 5.6 percent. Both grains touched 10-week lows.

Raw sugar for March delivery fell as much as 5.8 percent to a three-month low on ICE Futures U.S. in New York. Coffee tumbled 5 percent, the most in 13 months.

--With assistance from Sungwoo Park in Seoul, Ben Sharpies in Melbourne and Jae Hur in Tokyo. Editors: Patrick McKiernan, Steve Stroth

To contact the reporters on this story: Whitney McFerron in Chicago at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; Sharon Lindores in London at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

To contact the editor responsible for this story: Steve Stroth at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Authors: Commodities - Yahoo! News Search Results

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