Nov. 17 (Bloomberg) -- Commodities tumbled the most in eight weeks on concern that Europe’s debt crisis is spreading, hindering the global economy and eroding demand for energy, metals and grains.
The Standard & Poor’s GSCI index of 24 raw materials fell 2.9 percent to settle at 653.62 at 3:53 p.m. New York time, the biggest drop since Sept. 22. European and U.S. equity markets fell, and the cost of insuring against default on Spanish and French sovereign debt rose to records.
“The situation in the euro zone has deteriorated amid renewed worries about Italy and Spain’s fragile economies,” Myrto Sokou, a London-based analyst at Sucden Financial Ltd. said in a report. “The European economy looks more chaotic, with serious debt issues that hurt investors’ sentiment and limit risk appetite.”
German Chancellor Angela Merkel rejected French calls to rein in debt problems by issuing joint euro-area bonds or using the European Central Bank as a lender of last resort. The creditworthiness of U.S. banks may worsen unless the crisis is “resolved in a timely and orderly manner,” Fitch Ratings said yesterday.
Twenty of the GSCI components fell, led by silver and gasoline. The gauge has dropped 14 percent from a 32-month high of 762.22 on April 11.
Silver futures for December delivery plunged 6.9 percent to $31.497 an ounce on the Comex in New York, the biggest drop since Sept. 23.
Gasoline futures for December delivery declined 4.6 percent to $2.5071 a gallon on the New York Mercantile Exchange, the largest slump since Aug. 4.
Crude-oil futures for December delivery fell 3.7 percent to $98.82 a barrel. Earlier, the price touched $103.37, the highest since May 31.
Copper futures for March delivery fell 2.9 percent to $3.401 a pound on the Comex, the biggest decline in more than two weeks.
“Worries about a second recession are weighing on the market,” Tom Winmill, the chief executive officer of Winmill & Co., which manages $250 million, said in a telephone interview from New York. “Oil will be the most vulnerable in this scenario, and copper is also very vulnerable.”
Corn futures for March delivery dropped 4.4 percent to $6.2325 a bushel on the Chicago Board of Trade, erasing this year’s gain.
--Editors: Patrick McKiernan, Steve Stroth
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