Commodities fell to a one-week low as gold tumbled the most in three weeks and corn dropped after the U.S. Department of Agriculture forecast a record crop.
The Standard & Poor’s GSCI gauge of 24 commodities dropped 1.6 percent by 6:10 p.m. in London. Earlier, the index fell to 620.79, the lowest since May 2. Gold fell 2.4 percent, oil dropped 1.8 percent and coffee declined 2.1 percent.
Gold has dropped 14 percent this year and went into a bear market last month as the S&P 500 Index of U.S. stocks set a record and Europe’s benchmark Stoxx Europe 600 Index rose to its highest level since June 2008 this week. The corn harvest in the U.S., the world’s largest grower, will surge 31 percent this year after farmers planted the most acres since 1936, the U.S. Department of Agriculture said.
“The opportunity cost of holding gold has gotten too high with stock markets rising,” said Walter “Bucky” Hellwig, who helps manage $17 billion of assets, including some commodities and gold, at BB&T Wealth Management in Birmingham, Alabama. “With corn, when you see a lot of plantings, production goes up and the price goes down.”
Gold futures for June delivery dropped 2.4 percent to $1,432.80 an ounce on the Comex in New York, heading for the biggest decline on a closing basis since April 15 when prices tumbled 9.3 percent. Corn fell 2 percent to $6.355 a bushel on the Chicago Board of Trade.
Crude-oil futures for June delivery declined to $94.64 a barrel on the New York Mercantile Exchange. The Organization of Petroleum Exporting Countries bolstered oil output last month, a report from the group’s Vienna-based secretariat showed.
Arabica coffee dropped to $1.448 a pound on ICE Futures U.S. in New York, heading for the first decline since May 1.