Commodities Fall to Lowest Since July on ‘Soft’ U.S. Data

Commodities tumbled to the lowest since July, led by a plunge in precious metals, as U.S. retail sales fell the most in nine months and consumer sentiment unexpectedly declined.

The Standard & Poor’s GSCI Spot Index of 24 raw materials dropped 1.3 percent to close at 623.11 at 3:42 p.m. New York time. Earlier, the gauge touched 617.55, the lowest since July 13. Gold fell into a bear market, and silver plummeted to the lowest since 2010. Crude oil slumped to a one-month low.

Retail sales in March fell 0.4 percent, the most since June, government data showed today. The median forecast of 85 economists surveyed by Bloomberg called for an unchanged reading. An index that tracks consumer confidence dropped in April to a nine-month low. Citigroup Inc., in a report today, predicted 2013 would be the year that “the death bells ring” for the commodity supercycle.

“The economic numbers in the U.S. are turning soft,” John Kinsey, who helps manage about C$1 billion ($987.5 million) at Caldwell Investment Management Ltd. in Toronto, said in a telephone interview. “The last few numbers from the U.S. haven’t been all that robust.”

The Thomson Reuters/University of Michigan preliminary index of consumer sentiment declined to 72.3 from 78.6 in March. The April reading was lower than all 69 estimates in a Bloomberg survey that called for no change. Consumers’ assessments of their financial situation deteriorated.

Payrolls expanded by 88,000 in March, the smallest increase since June, government data showed on April 5.

Equities Favored

Precious metals have slumped this year as investors favored equities and the dollar. Cyprus may sell gold holdings to cover possible losses from emergency loans.

On the Comex in New York, gold futures for June delivery plunged 4.1 percent to $1,501.40 an ounce. The metal plunged 21 percent from a record settlement of $1,891.90 in August 2011, entering a bear market. After the settlement, the price touched $1,480, the lowest for a most-active contract since July 1, 2011.

Silver futures for May delivery dropped 4.9 percent to $26.331 an ounce on the Comex, the biggest decline since June 21. After the settlement, the price touched $25.855, the lowest since Nov. 18, 2010.

On the New York Mercantile Exchange, oil futures for May delivery declined 2.4 percent to $91.29 a barrel. The price earlier touched $90.27, the lowest since March 7.

Industrial Metals

On the London Metal Exchange, a gauge of copper, aluminum, zinc, lead, nickel and tin fell 2.6 percent, the most in a year.

Zinc dropped for the ninth straight week, the longest slump in at least two decades.

Data on April 15 may show that China’s economy expanded at an 8 percent annual pace last quarter, slower than projected in February, according to economists surveyed by Bloomberg News. The country is the top consumer of industrial metals.

Corn and soybeans gained on speculation that rain in the U.S. and snow in Canada will delay planting. Wheat climbed as cold weather threatens the winter crop in the southern Great Plains.

“Agriculture commodities are primarily driven by weather,” Bill Greiner, who oversees $14 billion as chief investment officer at Mariner Wealth Advisors in Kansas City, Missouri, said in a telephone interview. “The metals seem to be weakening on concerns about China, and the North Koreans flexing their muscles aren’t helping.”

The U.S. Defense Intelligence Agency has reported that North Korea now has some nuclear weapons small enough to be delivered by its ballistic missiles.

To contact the reporter on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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