Commodity prices fall on global growth worries
Most commodity prices dropped Monday as worries about global economic growth bubble back to the surface.
Gold, industrial metals and energy products all fell after a closely watched survey showed business confidence fell for a fifth straight month in Germany. The decline suggests that Europe's debt crisis is hurting the region's biggest economy.
About 43 percent of Germany's exports are sold in other countries that use the euro currency. Growth has slowed across much of the region and some countries have slipped into a recession. The U.S. and China have shown signs of economic weakness as well.
The discouraging news from all three regions has dampened enthusiasm over recently announced measures to boost economic growth in the U.S. and Europe. Slower economic growth cuts into demand for such commodities as copper, platinum, palladium and energy products.
Commodity prices rose in the weeks before the announcements by the Federal Reserve and the European Central Bank. Now, metals prices are falling on expectations for softer demand, said Catherine Virga, a base metals analyst with CPM Group.
However, she believes metals prices will eventually move higher but for now there is still more room for a correction.
Analysts also say investors are selling commodities for a profit. Some are using that money to buy safer assets such as Treasurys.
In December contracts, gold fell $13.40 to end at $1,764.60 per ounce, silver dropped 65.4 cents to $33.984 per ounce and copper ended down 5.75 cents to $3.7315 per pound.
October platinum decreased $15.60 to finish at $1,622 per ounce and December palladium fell $26.05 to $645.50 per ounce.
Benchmark oil fell 96 cents to end at $91.93 per barrel, heating oil dropped 2.2 cents to $3.0987 per gallon, wholesale gasoline decreased 2.49 cents to $2.9176 per gallon and natural gas ended down 4.8 cents to $2.837 per 1,000 cubic feet.
In other trading, orange juice futures fell 5.2 percent on expectations that storms in the Atlantic will miss key growing regions in Florida, said Jack Scoville, vice president Price Futures Group. Demand for orange juice produced in the U.S. remains lower than year-ago levels.
Orange juice for November delivery fell 6.55 cents to finish at $1.183 per pound.
Wheat for December delivery fell 5.25 cents to end at $8.92 per bushel, December corn dropped 3.5 cents to $7.4475 per bushel and November soybeans decreased 11.75 cents to $16.10 per bushel.
AP Business Writer David McHugh contributed to this report.