Commodities Drop as G7 Meets, Gold & Oil Among Losers
Members of the Group of Seven meet today to discuss the situation in Europe. The meeting could have bolster commodities, but in fact quite opposite has happened. Traders do not believe that politicians are able to tackle the expanding debt crisis in Europe and that skepticism translated in weakness of commodity markets. The poor mood of investors helped the dollar gain, pushing prices for raw materials further down. Even gold has not been able to profit from demand for a safe haven.
Several bad macroeconomic reports from the United States and Europe did not help market sentiment. US factory orders unexpectedly dipped in April, falling 0.6 percent. German factory orders declined 1.9 percent, more than 1.0 percent analysts predicted. Eurozone retail sales were down 1.0 percent in April, while specialists hoped them to stay unchanged. Bad fundamentals suggest that demand for raw materials will deteriorate.
July for delivery of crude oil declined $0.05 to $83.93 per barrel by 13:03 on NYMEX. Brent crude fell from $99.15 to $98.81 per barrel as of 19:31 GMT today on ICE. Yesterday, the price touched $95.63 — the lowest level since January 26. Gold went down from $1,621.20 to $1,617.40 per ounce on COMEX.
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