LONDON Feb 20 Commodities tumbled on Wednesday
as investors worried about global supply and demand issues amid
an uneven economic recovery, selling off gold, copper and oil.
There were also jitters ahead of minutes from the U.S.
Federal Reserve due to be released later on Wednesday.
Gold slid to the lowest levels in six months, benchmark
industrial metal copper fell to a one-month low and U.S. crude
oil shed more than $2 a barrel.
A rally in commodities this year on upbeat economic data
from the United States and China may have got ahead of actual
improvement in underlying demand, some analysts said.
A mixed reading of U.S. housing data added to concerns about
whether recent improvements in economic figures would continue.
"We're entering the demand destruction price zone - when you
start to have some fears about global demand," Olivier Jakob at
Petromatrix said, referring to oil prices.
"It's really a price level when you need to take into
account the risk that demand could take a hit."
The 19-commodity Thomson Reuters-Jefferies CRB index
lost 0.65 percent, dropping to the lowest level since
Jan. 11. The CRB rose 4.3 percent during January, but has eased
back during most of February, and has shaved its yearly gain to
only 0.5 percent.
Brent crude fell below $116 a barrel, down $1.70, as
the prospect of more Saudi supply outweighed optimism that an
improving global economy would bolster demand. U.S. crude
was at $94.41 a barrel, down $2.25, at 1654 GMT.
Spot gold fell to six-month lows, breaking through
support at $1,600 an ounce, as investors were drawn to riskier
Copper prices slipped on Wednesday to their lowest in
more than a month, dragged down by persistent demand concerns as
post-holiday buying from top consumer China remained subdued,
and with a strong dollar also weighing on prices.
(Reporting by Eric Onstad; Editing by Anthony Barker)