The Sunday Mail
THE world’s leading index of commodity prices has slumped to its lowest level in more than 12 years as China slows and America hints at tightening monetary policy.
The Bloomberg Commodity index, which tracks the prices of 22 different commodity prices such as gold, natural gas and oil, fell 0,3 percent to 99,84 in early trading, the lowest point since August 2002.
The recent bout of weakness in commodity prices came as the US Federal Reserve issued an upbeat view on the state of US economy.Minutes from the Federal Open Market Committee’s December meeting said the US economy is expanding at a solid rate with strong job gains, a signal that the central bank remains on track with plans to raise interest rates. Commodities, like all asset classes, have benefited from America’s loose monetary policy.
The upbeat view from the US economy came after another sign of a slowdown in China, with official figures showing profits from the industrial sector fell eight percent in December from a year earlier.
Last year, China’s annual economic growth slowed to 7,4 percent – its slowest pace in nearly a quarter of a century – as the property crisis in the country holds back the economy, and there is rising debt and slower demand for its products at home and abroad.
Most economists expect Beijing to set an annual-growth target for 2015 of seven percent.The slowdown in the Chinese economy, the world’s largest consumer of commodities, has caused a sharp fall in oil prices.
