Commodities tumble on Thursday

Commodity prices tumbled on Thursday, led by a near 15 per cent plunge in silver. At the same time, gold, crude oil, and copper each slid about 2 per cent, as easing geopolitical tensions and a firmer US dollar drove investors to unwind positions.

Spot silver suffered its steepest daily fall in years, while spot gold retreated from a near one-week high after hitting a record $5,594.82 per ounce last week. Silver had also surged to an all time high of $121.64 an ounce.

Oil prices fell roughly 2 per cent after the United States and Iran agreed to hold talks in Oman on Friday, easing fears of supply disruptions from the Middle East. Copper dropped as concerns over global demand persisted, with additional pressure from rising inventories in London Metal Exchange-registered warehouses, despite earlier support from China’s plan to expand its strategic copper reserves.

The US dollar index traded near a two-week high, weighing on dollar-priced commodities ahead of interest rate decisions by the European Central Bank and the Bank of England, both expected to keep rates unchanged. Prices had already come under pressure earlier in the week after US President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair, fuelling expectations of a hawkish policy outlook that raises opportunity costs for gold and silver.

Soybeans bucked the broader selloff, climbing to a two-month high after Trump said China was considering buying US cargoes. At the same time, iron ore slipped about 2 per cent, dragged down by elevated inventories.

Attribution: Reuters