Fear that Germany may not pass a crucial vote to shore up the eurozone’s rescue fund savaged commodities overnight, with copper falling to its lowest level in 14 months, and taking crude oil and grains down with it.
The red metal — widely considered to be a bellwether of the global economy — lost 7% of its value and sustained the second largest drop since the recession of 2008, Melbourne Age reported:
London Metal Exchange (LME) benchmark copper went untraded at the close, but was bid at $US7,250 a tonne, down 4.5 per cent from its close at $US7,594 on Tuesday. Losses gathered steam in electronic business, pressuring the price further down below $US7,100 and closer to Tuesday’s 14-month trough at $US6,800.
In New York, the key December COMEX contract plunged 19.30 US cents, or 5.6 per cent, to settle at $US3.2465 per lb, with after-hours losses taking it to a late low at $US3.1680.
The pessimism spread to other commodities, with the Reuters-Jeffries CRB index, a global commodities benchmark, losing 2.5% of its value. Asian and US stocks were hammered, with the Dow Jones industrial average losing 179 points, the Standard and Poor’s 500 index down 2.05%, and the Nikkei 225 index shedding 1%.
As has been the case in recent days, gold bullion was not spared the carnage, with spot gold slipping 0.3% to $1602.39 an ounce and heading for its biggest monthly decline since October 2008, Reuters pointed out.
