Selling pressure in commodities on liquidation - Commodity Online

BEIJING (Commodity Online): The buying momentum that took several commodities to fresh highs recently seem to be tapering and funds all over the world possessing stake in the sector has suffered significant losses over the last week.

Experts identified the nature of weakness as that of a technical one, but the recovery in the US dollar on Thursday looks to have complemented the fall in prices.

Commodities indices fell to fresh lows over the week, with the 19-commodities Reuters-Jefferies CRB index falling by 5 percent on Thursday alone and on the way to register the lowest weekly close since December of 2008. Meanwhile, the S&P 24 raw materials GSCI index fell for the fourth straight session on Thursday by 6.5 percent, witnessing the biggest weekly fall since 2009.

The vigourous selling pressure seen last week followed immense gains in the counters, with silver, oil, gasoline and coffee gaining over 23 percent so far into the year 2010.

The volatility and intense movements in the commodities markets voice yet another focal point, of which the emerging markets are wary about the most. Astronomical commodities prices in itself pose a threat to the economic growth process in the emerging markets, said the leaders of the BRICS nations last Monday.

The extensive weakness in commodities markets have taken equities down as well during the week. Stocks across the world showed significant losses in their books in the corresponding time.

Asian stocks have carried forward the weakness from earlier during the week and the MSCI index fell almost of a percent on Friday as an extension to its weakness from earlier during the week.