Most commodities retreat amid uncertainty about global economic issues; gold key exception

Most commodities prices fall on economic concern

Most commodities prices retreated Tuesday as unsure traders tried to determine if the world economic recovery is slowing down.

A key exception was gold, which settled slightly higher, although its advance was limited by selling that routinely occurs ahead of options expirations. Yet, it’s an indication of anxiety as traders monitor issues from Europe’s debt problems to potential inflationary curbs in China.

Several European countries are imposing budget cuts, including Britain where Queen Elizabeth said the cuts are needed to restore economic growth.

Commodities traders and investors are concerned that the cuts may slow economic growth, which would hurt sales of metals used in manufacturing.

In addition, China’s top economic planning agency wants price regulators to take action against rising food prices amid worries about higher inflation. That could become a potential issue since China is one of the largest consumers of commodities.

The global economic issues also sent U.S. stocks plunging. Investors turned to the safety of Treasurys and away from the euro.

Even with the gold options expiring, investors appeared to be willing to put money into the metal because of its safe-haven appeal, said George Gero, vice president at RBC Global Futures.

Gold for June delivery settled $4 higher at 1,198 an ounce after hitting $1,200.70 earlier in trading.

Other metals all settled down.

In July contracts, copper settled down 10.55 cents, or 3.4 percent, at $3.042 a pound, silver fell 21.9 cents to $17.781 an ounce and platinum lost $42.60 to $1,491.90 an ounce, down 2.8 percent.

June palladium fell 5.3 percent, losing $23.15 to settle at $430.44 an ounce.

Grains prices all fell. In July contracts, wheat fell 7 cents to settle at $4.605 a bushel; corn lost 6.75 cents to $3.6425 a bushel and soybeans fell 10 cents to settle at $9.305 a bushel.

In the energy sector, natural gas for June delivery bucked the trend and settled up 3.4 cents at $4.051 per 1,000 cubic feet on the New York Mercantile Exchange.

In other Nymex trading in June contracts, benchmark crude oil for July delivery fell $1.46 to settle at $68.75; heating oil fell 2.76 cents to $1.8717 a gallon; and gasoline fell 4 cents to settle at $1.9308 a gallon.

Natural gas fell 1.8 cents to settle at $4.017 per 1,000 cubic feet.