European Debt Crisis Threatens Global Commodity Collective Diving

In the shadow of global economic recession Shroud The commodities market has suffered heavy losses in the past two days. A commodity price index covering more than 20 varieties fell to a low of nearly ten months on Monday. Copper, crude oil, gold, silver and other varieties last week's total decline is close to or even more than two digits. Commodities in Europe have stabilised on Monday. However, gold, silver, copper and other varieties are still going down. Spot Silver Decline Once more than 16%.

Analysts believe that the European debt crisis may worsen the risks to world economic growth. Investors eager to get cash to make up for asset losses and the strengthening of the US dollar index have brought pressure on commodities.

　 Commodity index hit ten month low

Monday morning in London, cover The S & P GSCI commodity price index for the 24 commodities dropped by another 1.1%. Last week, the index fell 8.3%, the biggest weekly decline in four months. Earlier this Monday, the commodity price index fell 2.6%, hitting the lowest level since last December 1st.

In a single variety, silver is still a heavy drop, and Europe's early trading has fallen by more than 6% to around $28.9. Previously, spot silver fell more than an astonishing 16%, a low of $26.15, the lowest level since last November. Last week, the price of silver fell more than 20%, only 17.7% last week, the biggest one-day decline since 1984.

Gold futures fell 1.6% to 1630 U.S. dollars on Monday. Gold fell 9.6% last week, the biggest weekly decline since the mid 80s. Last Friday, gold prices plunged 5.9%, the biggest single day in 5 years. Decline 。

Lun copper fell less than 1% in early trading in Europe on Monday. Last week, copper fell 15%. As of last Friday, copper fell for 6 days in three months, probably the longest consecutive record decline since December 2008, LME.

New York's oil price plunged 9.2% last week on Monday, from a sharp drop of over 3% to a slight rise, up to $80. {page_break}

　 Selling gold to make up for losses?

Dominic, global head of commodities research at UBS's wealth management department, said that the current economic situation is even worse than three to six months ago. He expects the commodity index to fall further by 10% to 15%.

Market participants believe that in the past two days, the decline of gold and other commodities is obvious, partly because investors are eager to cash in to compensate for losses in other fields.

Gold is one of the few assets so far this year that still has positive earnings, and to some extent, it is also the only hope, UBS analyst John gross said in a report on Monday. So when investors are crazy about finding money, gold is probably the only asset that can be cash in. He said that although the adjustment of gold was not surprising, the drop was surprisingly deep.

Another factor that has brought gold and silver futures prices down is the increase in margin. The Chicago Mercantile Exchange Holdings (CME) said on Friday that it would raise the margin requirements for new and existing positions in gold and silver futures on Friday.

On the whole, with the decline of risk preference, the recent popularity of commodity market has obviously cooled down. Data from the US Commodity Futures Trading Commission showed that in the week ending September 20th, institutional investors such as hedge funds cut the net long positions of 18 commodity futures and options by 20%, and the single weekly drop was the most in a year and a half.

　　 Economic downturn restricts demand

Insiders pointed out that the collapse of the commodity market is also closely related to the demand worries brought by the risk of economic recession.

Kijem, head of asset strategy investment at Baring Asset, said that the popularity of the commodity market is still very weak. Investors are becoming more and more aware that the performance of the economy will not be good in the next 6 to 12 months. He said that the current market is extremely short of confidence, and European governments must take some concrete measures to rebuild their confidence.

Pacific Investment Management Company CEO El said that the growth of the developed economies will stagnate in the coming year and the European economy will fall into recession. In the latest world economic outlook released last week, IMF lowered the forecast of global economic growth to 4% this year, 0.3 percentage points lower than its forecast in June. The report stressed that if the global coordination action is not adopted, the European and American economies may have a serious recession, and the economy may not grow within ten years.

On the other hand, the US dollar's continuous rebound has also brought pressure on US dollar priced commodity prices. On Monday, the dollar index was basically flat in Europe early in the morning, near 78.2. So far this month, the US dollar index has risen nearly 6%. The deterioration of the euro zone situation, coupled with the deterioration of the global economic growth prospects, made the US dollar the only "safe haven", and the Fed did not propose QE3 (the third round of quantitative easing) last week, which also constituted a certain support for the US dollar.