Investors flee commodities after bad jobs data
NEW YORK — Commodity prices fell sharply Thursday as a worse-than-expected jobs report sent investors in search of less risky assets.
The Labor Department rattled the market when it said employers slashed 467,000 jobs in June, far more than the 363,000 economists had expected. The unemployment rate jumped to a 26-year high of 9.5 percent.
The report, one of the most closely watched gauges of the economy’s health, was unsettling for investors who have grown increasingly fearful that any recovery won’t be as quick or as strong as many have been hoping for.
Looking to safeguard their money, traders shied away from commodities in search of more conservative investments such as Treasurys. The dollar moved higher against most other currencies.
Even gold, traditionally a hedge against inflation, traded as if it was a risky currency, he said.
Gold for August delivery fell $10.30 to settle at $931 an ounce on the New York Mercantile Exchange. The yellow metal lost 1 percent this week.
Other metals also declined. September silver dropped 35.2 cents to $13.4080 an ounce, while July platinum fell $9.90 to $1,186.60 an ounce.
September copper futures shed 2.5 cents to $2.3055 a pound.
The commodities market rallied this spring on growing confidence about the economy. But the latest slide in prices shows that commodities remain vulnerable, said Matt Zeman, head trader at LaSalle Futures in Chicago.
“I think the markets are being hit with a reality shock again,” he said. “We’re still not at that turnaround point … a lot of these markets have been overbought and gotten way ahead of themselves.”
Zeman predicted that the losses could extend into next week, as U.S. investors return to the market following the Independence Day holiday.
On Wall Street, all the major indexes fell more than 2 percent, including the Dow Jones industrials which lost 173 points in afternoon trading.
Oil prices tumbled on the Nymex to their lowest level in a month.
Light, sweet crude for August delivery fell $2.58, or 3.7 percent, to $66.73 a barrel after earlier falling as low as $66.54 a barrel.
In other Nymex trading, gasoline futures fell 6.82 cents to $1.7908 a gallon, while heating oil futures lost 6.41 cents to $1.7016 a gallon.
On the Chicago Board of Trade, grain prices faltered.
September wheat futures lost 6.5 cents to $5.29 a bushel, while corn for September delivery fell 10.75 cents to $3.4575 a bushel.
August soybeans dipped 6.5 cents to $11.54 a bushel.
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AP Business Writer Chip Cutter in New York contributed to this report.
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