May 9 (Bloomberg) -- Commodities fell, marking the longest slump since August, as a global equity rout and an unraveling bailout of Greece increased the risk that a slowdown in the global economy will curb demand for raw materials.
The Standard & Poor’s GSCI Spot Index, which tracks 24 commodities, lost less than 0.1 percent to settle at 648.28 at 3:44 p.m. in New York, leaving the gauge up 0.5 percent this year. The index fell to 641.8 yesterday, the lowest since Dec. 29, as the euro extended a drop. Silver and gold plunged to four-month lows. The MSCI All-Country World Index of equities dropped to the lowest since January today.
Wheat, corn and zinc led the commodity decline today after the head of Greece’s biggest party failed to reach an agreement on a new government. That left responsibility for forming an administration to Alexis Tsipras of the Syriza party, who said he’ll cancel the bailout. Services and manufacturing shrank in April in the euro region, and unemployment soared to a 15-year high, according to reports last week. The U.S. added fewer jobs than forecast last month, government data showed last week.
“Investors should adopt the fetal position,” said John Stephenson, who helps to manage $2.7 billion at First Asset Investment Management Inc. in Toronto. Commodity prices may extend declines, he said.
Oil fell for a sixth day, the longest slump in almost two years, with the futures contract for June delivery declining as much as 1.9 percent to $95.17 a barrel on the New York Mercantile Exchange. Gold futures for June delivery lost as much as 1.6 percent to $1,578.50 an ounce on the Comex, the lowest since Jan. 3. Silver futures for July delivery fell as much as 2.9 percent to a four-month low of $28.615 an ounce.
‘Off the Table’
“You’ve got U.S. growth, which looked promising, softening,” Stephenson said. “You’ve got Europe clearly in the middle of a crisis, and you’ve got China still reluctant to be accommodative. For a while, global growth is off the table.”
In Greece, Tsipras said he expected Antonis Samaras of New Democracy and Evangelos Venizelos, who leads Pasok, to revoke written pledges to implement austerity. Both rejected the call.
The euro dropped for an eighth straight session to the lowest since late January. European stocks fell to the lowest level in almost four months, and Spanish default risk climbed to a record.
Base metals declined, with zinc falling as much as 2.5 percent to $1,925.75 a metric ton on the London Metal Exchange, the lowest since Jan. 12. Lead dropped as much as 2.2 percent. Wheat prices fell 2.4 percent, marking the biggest decline in a week on the Chicago Board of Trade, on the outlook for increased U.S. supplies.
“Political turmoil in Greece raised concerns that the nation may not implement austerity measures and worsen Europe’s debt crisis,” Ken Kajisa, an analyst at broker ACE Koeki Co. in Tokyo, said by telephone. “Risk aversion by investors increased, leading to sales of industrial commodities.”
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