NEW YORK/LONDON: Gold ended June with its biggest quarterly loss on record, while copper, corn and coffee all ended with deep declines, adding to evidence that a decade of super-cycle gains for commodities is over.
Rallying equities already had investors pulling money from slumping raw material markets last week, when Federal Reserve Chairman Ben Bernanke indicated that the US central bank would soon wind down its bond-buying program.
Concerns of slowing growth in China, a major consumer, added to the bearish vibe and an intense credit crunch there last week unnerved global traders. Anxiety eased on Friday as Chinese stocks rebounded and its central bank issued soothing messages.
Benchmark Brent crude oil fell 66 cents on Friday and sank 7.1 percent since March for a third quarterly decline, the longest streak in 15 years. Copper, near its lowest price in three years, lost 10.3 percent in the quarter. New-crop corn dived to a seventh day of losses after the US government reported that farmers had planted larger crops than expected.
The ThomsonReuters-CRB commodity index, down 7 percent for the quarter, has fallen 23 percent since March 2011. Apart from the financial crisis, it is the deepest and most sustained decline since raw material markets began to rally in early 2002, a definitive end to a cycle of super-charged gains.
Gold has fallen the most, as rising bond yields and easing inflation worries made it less attractive to hold a non-yield-bearing asset. Investors fled gold exchange traded funds and sliding prices failed to entice physical buyers.
"Prices are basically falling in a vacuum as there's no counterparty to buy," London and Capital Investment Director Ashok Shah said.
"The market needs to get into extremely oversold territory before you will see people coming back in. The view is that it's always been difficult to decide what is fair value," he added.
In early trade, spot gold hit a low of $1,180.71 an ounce, its cheapest since August 2010. Quarter-end book-squaring and bargain-hunting boosted it in later trade and it rose 2.3 percent to $1,126.76 an ounce.
From March to June, gold slid about 23 percent, its sharpest quarterly drop ever based on Reuters data from 1968. Without a major rally, gold should post its first annual fall in 12 years.
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