Commodities Prices Slip on a Stronger Dollar and European Credit Downgrades
Commodities prices dropped off in recent trading after the dollar gained and there were renewed worries over Europe.
Corn, wheat and soybean extended losses after the recent selloff, which was triggered by bigger-than-expected supply estimates from the US government.
Fears of a wide-ranging Eurozone downgrade by Standard & Poors, confirmed by the credit rating agency after most commodities had settled for the day, pressured oil and metals prices through the day. S&P downgraded the credit ratings of nine Eurozone countries.
Grains markets extended their losses after a forecast for more crop-boosting rain on South American production areas. Corn, wheat and soybean prices had mostly rallied over the past month on worries that a drought in Brazil and Argentina would decimate the global supply of grains. In recent trading, Corn fell around 7 percent, Wheat fell 4 percent and Soybeans closed down 1 percent lower. Note that investors can take positions on a range of soft commodities with firms like ETX and InterTrader.
Looking at the GFT Markets charts, gold also fell 1 percent after the dollar surged against the euro and fears about an imminent credit downgrade of Eurozone countries prompted bullion investors to take profits on the recent rally.
The metal fell along with US equities and other commodities as ratings agency Standard & Poor’s was poised to lower ratings of several Eurozone countries including France and Austria.
Having said that, gold is still up about 5 percent so far in 2012, thanks to buying by investors re-entering the market after a 10 percent drop in December.
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