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BS: Commodities Drops to Five-Year Low Amid Slump in Metals to Crops
 
Commodities sank to the lowest level in more than five years as gold and silver slumped and industrial metals fell on concern that slowing global growth will curb demand.

The Bloomberg Commodity Index (BCOM) fell as much as 0.5 percent to 115.3634, the lowest since July 13, 2009, and was at 115.6581 at 1:43 p.m. in London. Gold and silver futures fell, platinum reached a five-year low and crops from wheat to soybeans also retreated.

Raw materials are set for a fourth annual decline, the longest slump since at least 1991, as the dollar gained, curbing the appeal of commodities as a hedge against inflation. The world economy is in its worst shape in two years, with the euro area and emerging markets deteriorating and the danger of deflation rising, according to a Bloomberg Global Poll of international investors.

STORY: The Strong Dollar Weighs Heavily on the Commodities Market
“The global economy remains weak outside the U.S., keeping monetary policies on a divergent course and supporting the dollar,” said Hou Jun, a Shenzhen-based strategist at Citic Futures Co., a unit of China’s biggest listed brokerage. “The energy complex is weighed down by supply issues, while industrial metals are affected by a slowdown in China.”

The BCOM Index that tracks 22 raw materials tumbled 8 percent this year and is poised for a 1.7 percent decline this week, which would be the worst such performance in two months.

‘Weakening Appetite’

Gold for December delivery dropped 1.1 percent to $1,148.90 an ounce by 8:45 a.m. on the Comex in New York. Silver for delivery in December dropped 1.8 percent to $15.345 an ounce in New York, set for a fourth weekly decline. Platinum for January delivery lost 0.7 percent to $1,190.90 an ounce, and touched $1,183.50, the lowest since July 2009.

VIDEO: Iron Ore Drops to Five-Year Low Ahead of APEC
“U.S. equities and slumping oil prices continued to weaken appetite for the yellow metal,” Abhishek Chinchalkar, an analyst at Mumbai-based AnandRathi Commodities Ltd., said today in a report, referring to the gold market.

Soybeans fell on speculation lower crude oil prices will cut demand for diesel made from vegetable oils. Soybeans for January delivery fell 1.2 percent to $10.41 a bushel on the Chicago Board of Trade by 5:51 a.m. local time. Wheat for March delivery fell 0.4 percent to $5.535 a bushel in Chicago.

Copper headed for its first weekly drop in almost a month in London amid concern that slowing global growth will temper demand. Copper for delivery in three months lost 0.6 percent to $6,617.25 a metric ton by 1:46 p.m. on the LME.

VIDEO: How China Will Impact the Oil and Metals Markets
West Texas Intermediate crude was set for the longest run of weekly declines in almost three decades. WTI crude added 30 cents, or 0.4 percent, to $74.51 a barrel in New York, paring this week’s decline to 5.2 percent.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 of its most-traded peers, rose 0.3 percent, extending this year’s advance to 7.8 percent.

To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Rupert Rowling in London at rrowling@bloomberg.net

STORY: In India, Falling Oil Prices Make Modi's Job Much Easier
To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net Rachel Graham, Randall Hackley
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