A key gauge for raw materials prices has tumbled to the lowest in eight months amid mounting fears of a global recession.
The Bloomberg Commodity Spot Index, which tracks futures contracts for everything from oil to copper and wheat, fell 1.6% to settle at its lowest level since Jan. 24. The measure has lost almost 22% since peaking in June and has erased all of its gains since Russia’s invasion of Ukraine.
The dollar’s relentless surge to repeated records is making commodities priced in the currency more expensive for overseas buyers, further eroding the demand outlook.
While global inventories for many raw materials remain tight in the face of robust demand, there is increasing concern of a pullback. Unprecedented interest-rate hikes by central banks to stem the highest inflation in decades is stoking worries that the tightening measures will throw economies around the world into recession. A slowdown would hurt the outlook for energy demand and sap investor appetite for risk.
(By Gerson Freitas Jr.)