Commodities fell for a fifth day, extending the biggest rout since December 2008, as investors cut their holdings in oil, silver and industrial metals amid concern that economic growth will slow. The Standard & Poor’s GSCI Index of 24 raw materials fell as much as 3.6 percent to 658.93 points, and was at 672.25 as of 10:20 a.m. in London. The gauge fell 11.4 percent in five days, the longest losing streak since August. Crude oil slumped as much as 5.2 percent, silver futures 5.4 percent and copper for three month delivery 1.8 percent. Even after this week’s plunge, the S&P GSCI index is still 6.4 percent higher for the year. “It’s panic,” said Michael Shaoul, chairman of Marketfield Asset Management, which oversees $1 billion in New York. “It’s not a global financial crisis. It’s a classic liquidation move in a crowded trade.” Investors held a record $412 billion of raw-material assets by the end of March, almost 50 percent more than a year earlier, according to Barclays Capital. Investment linked to commodity indices reached a record-high $352 billion last month, Bank of America Merrill Lynch said today. Funds held a net 1.49 million futures and options in 18 commodities by April 26, 57 percent more than a year earlier, within 4.8 percent of a record, according to U.S. Commodity Futures Trading Commission data compiled by Bloomberg. Crude oil fell as much as 5.2 percent to $94.63 a barrel in New York trading, while Brent crude oil retreated as much as 5.1 percent to $105.15 a barrel in London. Gasoline declined 1.9 percent to $3.0586 a gallon on the New York Mercantile Exchange, and natural gas rose 0.1 percent to $4.266 per million British thermal units. Central Bank European Central Bank President Jean-Claude Trichet said policy makers remain “extremely alert” on inflation, and indicated they may take further decisions on interest rates when they have new economic projections in June. The ECB is “monitoring very closely all that will happen” after keeping its benchmark interest rate at 1.25 percent yesterday, Trichet told Bloomberg Television in an interview in Helsinki today. The ECB raised rates on April 7, joining China, India, Poland and Sweden in seeking to control inflation. A U.S. Labor Department report today is forecast to show employers added 185,000 jobs in April after gaining 216,000 positions in March. Copper for delivery in three months fell 0.7 percent to $8,762.50 a metric ton on the London Metal Exchange. Aluminum, nickel, zinc and lead also retreated. Gold for immediate delivery rose 0.5 percent to $1,482.13 an ounce. ‘A Correction’ “It’s a pretty big move, but we do think it’s a correction in what we still think is a very positive environment for commodities from a fundamental point of view,” said Kevin Norrish, a managing director at Barclays Capital in London. “We’ve had some fairly downbeat macroeconomic data recently, big moves in the currency markets, with the dollar strengthening quite a lot, and extreme volatility in the silver market. And that’s led to a little bit of liquidation.” Silver futures traded on the Comex extended a decline into a bear market, dropping 2.6 percent to $35.285 an ounce after CME Group raised margin requirements by 84 percent in less than two weeks. The slump in raw materials comes as Glencore International AG sells shares in an initial public offering which may value the Baar, Switzerland-based commodity trader at about $61 billion. Goldman Sachs Group Inc. (GS) in reports on April 11 and April 15 told investors to be “underweight” commodities in the next three to six months. The bank still expects commodities to advance about 10 percent over the next 12 months. Cocoa Slides In agricultural markets, cocoa for July delivery slid 0.5 percent to $3,041 a ton on ICE Futures U.S. in New York. Wheat declined 0.1 percent to $7.53 a bushel on the Chicago Board of Trade, while corn fell 1.2 percent to $7.01 a bushel and soybeans lost 0.5 percent to $13.15 a bushel. “There may be a little bit more downside, but probably not much more,” Norrish said. “The fundamental support is going to kick in pretty soon, so we’d expect to see a pretty good recovery from these levels before too long.” To contact the reporter on this story; Maria Kolesnikova in London at mkolesnikova@bloomberg.net; To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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