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Commodities Take Hit from Europe

December 13, 2011 at 4:16 by Vladimir Vyun

The start of this week was an unpleasant one as most commodities took a great hit as concerns about Europe reemerged. The main reason for the pessimism was the warning from Moody’s Investor Service that it may downgrade the credit ratings of the eurozone countries. The European leaders attempted to address the problems during the summit on the last Friday, but the implications of the meeting will be felt over a longer term, not in an immediate future, so the rating agency wrote:

But in the absence of policy initiatives in the near future that stabilise credit market conditions effectively, Moody’s believes that the system remains prone to further shocks, which would likely lead to selective rating changes. As a result, Moody’s intention remains to revisit sovereign ratings of euro area and EU countries during the first quarter of 2012.

The Standard & Poor’s GSCI index of 24 commodities fell as much as 1.3 percent to close at 638.93 after earlier it reached 636.8, the lowest level since November 25.

Gold slumped from $1,707.50 to $1,663.90 per ounce on COMEX yesterday and traded today at $1,654.70. Silver slipped from $31.76 to $31.25 on the previous trading session. Copper was down from $3.5045 to $3.4460 per pound and traded today near $3.4435. Brent crude rose from $107.23 to $107.50 per barrel today on ICE after yesterday’s drop from $108.75 to $107.11 per barrel.

If you have any questions and comments on the commodities today, use the form below to reply.

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