Dragged down by poorly performing single-commodity indexes for silver, copper and lead, The
Notable among the forecasts was the September 20 International Monetary Fund (IMF) announcement that the IMF had lowered its growth outlook through 2012, saying the global economy has entered a “dangerous new phase.”
The three most significant downside performing single commodity indexes were silver, copper and lead, which were down 27.98%, 25.03%, and 23.16% respectively, in September.
Down 27.98% in September, silver suffered its second-biggest monthly dollar loss in history, raising red flags on technical charts along the way. Silver, used in manufacturing and industrial applications, took a big hit when China indicated its manufacturing sector had contracted for the third consecutive month. As of yet, U.S. manufacturing sector demand has not shown the level of weakness seen in China.
Indexes for copper, which plunged 25.03%, and lead, off 23.16%, followed silver lower in September. Over the course of the month, copper and lead fell to their lowest levels in about a year. Barclays Capital research said on Sept. 30 that, despite concerns the risk of a repeat of the 2008-09 crisis and slowing growth could mean further weakness in prices, if the European economic situation can be stabilized, conditions for a price recovery may start falling into place. Barclays research indicated that, while its economic team believes the world is experiencing a pronounced mid-cycle slowdown, these conditions will not spiral into a recession, mainly because of continuing expansion in emerging economies and an improvement in the U.S.
“This would imply that while base metals demand will be weaker than previously forecast, it will not experience the scale of collapse witnessed during the previous downturn,” Barclays’ researchers wrote in the report. “However, the outlook is extremely uncertain, and if the market’s worst fears about debt and growth are realized, the significance of fundamentals will further diminish, and they will not be likely to prevent further sharp price declines.”
In September, the
Year to date, the
Data courtesy of Dow Jones Indexes