The deeper reasons for the great commodities sell-off

Supply and demand are key factors in the current commodities slump, but so are fundamental shifts in financial markets and global trading strategies.

The across-the-board sell-off in commodities that has accelerated through the second half of this year is unusual both in its severity and its lack of discrimination, raising the question of whether there is more at play than conventional fundamentals.

That’s not to say that the fundamentals don’t explain lower prices in all the major commodities.

China’s slowing growth rate, the Eurozone’s sluggish, faltering state, and Japan’s slide back into recession would all point to lower commodity prices.

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