Futures Industry News
Commodities see rare decline in 2011
Dec 30, 2011 10:19 AM
For a year in which many commodities set record-high prices, 2011 has proven disappointing for the market as a whole.
Bloomberg notes that for the first time since 2008, the year of the financial crisis in the U.S., commodities as a whole declined in 2011. By 7:26 a.m. on Friday, December 30, Standard & Poor's GSCI Total Return Index, a critical index that comprises 24 major commodities, had fallen to 4,889.7, a decline of 1.1 percent on the year.
The Wall Street Journal notes that the several key commodities in each sector all hit record prices earlier in the year, ranging from the beginning of the year for the critical industrial metal copper to late summer for gold, a common safe haven during times of economic uncertainty.
Of these record setters, however, gold has declined the least at 18 percent below its peak. Cotton, which hit $2.1515 per pound in early March has fallen as much as 57 percent on high production and declining demand.
"What happens next year really depends on what happens with global growth,"Dan Denbow, a co-fund manager of the $2.1 billion USAA Precious Metals and Minerals Fund in San Antonio, explained to Bloomberg. "Investors may not be as quick to come back to commodities unless they get a very good feeling about global growth."
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