Commodities fell to a one-week low, led by industrial metals, amid concern that Europe’s bailout of Greece will be derailed, while manufacturing in China slowed.
The Standard & Poor’s GSCI index of 24 raw materials slumped 1 percent to settle at 641.69 at 3:46 p.m. New York time. Earlier, the gauge touched 627.96, the lowest since Oct. 21. In London, nickel tumbled 5 percent, while aluminum, lead and zinc fell more than 4 percent.
European leaders pressed Greece to uphold the terms of a bailout in a bid to stop the deal from unraveling on the eve of a global summit. Greek Prime Minister George Papandreou said he would put the plan to a referendum. A manufacturing index fell to the lowest since February 2009 in China, the world’s leading user of industrial metals.
“We could have a shaky market ahead as the Greek crisis increases risk aversion,” Gabor Vogel, a senior commodity analyst at DZ Bank AG, said in a telephone interview from Frankfurt. China is going through a “soft patch,” he said.
The GSCI index fell for the third straight session, the longest slump in a month. The gauge has dropped 16 percent from a 32-month high of 762.22 on April 11.
The dollar headed for the biggest two-day gain since December 2008 against a basket of major currencies, eroding the appeal of commodities.
MF Global Holdings Ltd., the holding company that filed for bankruptcy protection yesterday, was suspended from trading on the London Metal Exchange. CME Group Inc., the largest futures market, suspended MF Global Inc., a broker-dealer unit, as a clearing member.
“Metals remained under pressure amid renewed fears in Europe and a panicky reaction to MF Global’s bankruptcy,” RBC Capital Markets LLC said in a report. “Sentiment can turn on a dime at the moment as the market digests any fresh news. The only thing we can promise with any certainty is that volatility will remain elevated.”
Last month, the GSCI index rose 9.6 percent, advancing to a six-week high on Oct. 27, as European leaders agreed to expand a rescue fund designed to stem the region’s sovereign-debt crisis.
Gold futures in New York fell today as the greenback surged, and silver tumbled 4.7 percent. Crude oil dropped for the third straight session.