March 1, 2021

COMMODITIES-Oil tumbles on Europe recession fears; gold up

From Reuter’s:

* U.S. crude oil down 4 pct, sharpest drop since June
* Copper falls for first time in 5 sessions
* Arabica coffee, raw sugar join slide as dollar rises
* Gold stays near 11-month highs on safe-haven demand

By Barani Krishnan
NEW YORK, Oct 3 (Reuters) – Oil prices tumbled on Monday, with U.S. crude posting its largest drop in four months, after European economic data pointed to a recession that could further hurt global demand for raw materials.

Copper, Arabica coffee and raw sugar — markets that had risen in the past two sessions — joined the sell-off after a rally in the dollar made dollar-denominated commodities costlier for holders of the euro and other currencies.

Data out of China indicated a seventh quarter of economic slowdown in the world’s No. 2 economy, adding to the pressure.

Gold stayed near this week’s 11-month high, as more investors turned to the precious metal viewed as a safe haven in times of economic and political trouble.

“Gold has certainly got a bit of spring in its step at the end of the summer break,” said Ross Norman, chief executive at gold-broking firm Sharps Pixley. “There is good physical buying coming through and central bank buying is firm so the market will support it.”

Futures of grain such as soybeans, wheat and corn also posted small gains, rebounding from early weakness. “We were getting into some technically oversold territory and to see a spike in the buying activity is not uncommon,” said Karl Setzer, a commodity trading adviser at MaxYield Cooperative in West Bend, Iowa, who follows the grain markets.

The Thomson Reuters-Jefferies CRB index settled down 1.6 percent, its sharpest percentage decline since Sept. 18. Twelve of the 19 markets tracked by the CRB were down. The gainers were led by nickel, which rose 1.3 percent.

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