Gold rout spreads to other metals

LONDON: The selloff in gold is infecting metal markets from copper to zinc and tin. “Commodities are not in vogue,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by e-mail. “The speculative financial investors are still withdrawing from the markets. The weakness of the precious metals prices is spilling over to the base metals.”

Copper, zinc and lead fell more than 1 per cent. The worst losses were in tin, which fell as much as 4.9%, the most this month. Gold futures retreated for a 10th day in the longest run of losses since 1996 as Goldman Sachs predicted further declines and investors sold more through funds. Societe Generale SA expects surpluses in copper, aluminum and tin this year.

China's economy is set to expand at the slowest pace since 1990, curbing demand in the world's biggest consumer of metals.

The strengthening dollar has also hurt commodity prices as the Federal Reserve moves closer to raising borrowing costs. The Bloomberg Commodity Index of 22 raw materials touched a 13-year low Wednesday, dragged down by declines in metals, grains and oil.

Copper for delivery in three months fell 1.4% to $5,377 a metric ton by 1:09 p.m. on the London Metal Exchange. It earlier reached the lowest since July 8.

Futures for September delivery lost 1.5% to $2.437 a pound on the Comex in New York. Tin was last down 3.6% to $14,790. Lead reached a two-week low, while nickel and zinc also declined. Aluminum was little changed.

Japan’s biggest nickel producer Sumitomo Metal predicted another world surplus this year as demand growth slows in China. Norsk Hydro ASA said on Tuesday that China's shipments were compounding a global aluminum glut and damaging the industry.