Commodities opened higher this morning after a broad decline overnight as investors continue to focus on a slow worldwide economic recovery.
Both stocks and commodities have performed fairly well since early March as the investment community grew more hopeful that the now two-year-long rally would soon be coming to and end. But disappointing economic reports, including those that showed high levels of unemployment and low consumer confidence, continue to worry investors.
Metal and energy prices were hit hardest in Asia last night amid increasing fears that a delay in the economy’s recovery will keep a lid on demand for basic materials.
Strength in the US dollar, which makes commodities less appealing for foreign buyers, also curbed demand.
Crude oil for August delivery fell to $60.01 per barrel, the lowest level since May 19th, while natural gas prices hit their lowest level since mid-2002. Natural gas continues to be one of the worst performing commodities over the past several months. Gasoline also fell to a two-month low of $1.6290 per gallon. Hopefully for consumers, this drop in prices will be reflected at the pump.
Gold prices also touched a two-month low of $904.80 an ounce, while silver fell well below $13 to $12.74 an ounce. In other precious metals, platinum fell to $1093.20 an ounce, while palladium dropped to $233.00 an ounce.
Base metals also sold off broadly. Copper fell to $2.1420 per pound while aluminum dropped to $0.7225 per pound.
Despite last night’s sell off, both metals and energies opened higher this morning. Forward month crude oil prices were last seen up 1.1% to $61.06 per barrel, while natural gas was up 1.2% to $3.427 per Mcf.
Precious metals were also seen higher this morning with gold up 0.6% to $914.40 an ounce and silver up 0.2% to $12.875 an ounce.
Luke Burgess
Managing Editor, Gold World
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