Many key global commodity prices will start this week substantially lower after taking hits last week as investors rushed to sell as German moves failed to assuage fears over Europe's sovereign debt crisis.
The price of copper fell 5.6%; oil fell 3.8%and silver dropped 4.4%, according to Associated Press.
"It was a sharp reversal from the previous day, when prices rose on speculation that European leaders could be closer to drafting a plan to contain the region's debt crisis. That optimism faded after German Chancellor Angela Merkel hinted that a second Greek bailout package may have to be renegotiated. Several European leaders want banks to take bigger losses on Greek bonds but France and the European Central Bank oppose the idea," AP noted.
"Investors are concerned that a Greek default would affect the broader European economy. There are already signs that global economic growth is slowing, which could hurt demand for commodities."
The news service noted that December gold fell $34.40 to end at $1,618.10 an ounce; December silver fell $1.402, or 4.4%, to $30.134 per ounce; September platinum fell $39.80 to $1,534.20 an ounce and December palladium fell $15.20 to $634.75 an ounce.In other trading, oil prices dropped after the government reported an unexpectedly large increase in crude supplies and said demand remains weak.
"The Energy Department said crude inventories rose 0.8% last week. Analysts surveyed by Platts had expected stockpiles to be unchanged. In addition, demand for gasoline over the four weeks ended Sept. 23 was 2.4% lower than a year earlier," AP added.
"Crude oil fell $3.24 to end at $81.21 per barrel on the New York Mercantile Exchange. Heating oil dropped 5.86 cents to $2.8271 per gallon, gasoline futures fell 6.07 cents to $2.5753 per gallon and natural gas dropped 7.6 cents to $3.799 per 1,000 cubic feet."
