Crude oil, silver registers huge fall engulfed by an unprecedented wave of selling

From palm to crude oil, rubber to gold, the commodities universe had one of its worst days on record on Thursday, engulfed by an unprecedented wave of selling. Crude oil fell a record $12 a barrel while silver saw its biggest one-day fall in 31 years.

From innocuous profit-taking to global economic concerns, reasons abound. Many real, several imagined and some invented. Some losses were recouped on Friday, but scars from the previous day’s whiplashing remain.

WHAT CAUSED THE FALL
Lower-than-expected demand due to renewed global economic uncertainties.
US Crude oil fell $10 a barrel on Thursday, recording one of its biggest falls ever Gold prices fell for four days, but held firm on Friday Silver prices plunged nearly 12% on Thursday, the biggest fall in three decades.
Slackening of China’s appetite for commodities because of monetary tightening.
Exit of late investors into commodities who plan to cut losses fearing correction.
Commodities was the best-performing asset in 2011 until a week ago, attracting investors

HOW CAN IT BENEFIT US
Fuel prices may not rise as steeply as earlier expected; easing of inflationary pressures.
Lower input costs for several industries, easing pressure on margins.
Investors exiting commodities may invest in emerging market stocks.
Falling edible oil prices to help control prices of food products.
Cheer to people buying gold on the last day of Akshay Tritiya