LONDON, May 18 -- Commodities fell to a seven-month low, led by industrial metals and energy, on speculation that efforts in Europe to curb government debt will erode economic growth.
The Reuters/Jefferies CRB Index of 19 raw materials slid 2.1 percent to 253.20, after touching 252.83, the lowest level since Oct. 5. Copper plunged the most in 15 months, crude oil fell to the lowest price since December, while soybeans and wheat futures slipped to the lowest levels in almost six weeks.
The euro dropped to a four-year low against the dollar as European Central Bank President Jean-Claude Trichet called for a "quantum leap" in policy making to address the region's sovereign-debt crisis. Europe consumes about a third of the world's natural gas, a quarter of the oil and a fifth of the copper, according to BP Plc and Barclays Capital.
"As austerity measures are imposed in various economies and consumption declines, the prospect for lower asset values becomes a real threat," Daniel Brebner, a Deutsche Bank AG analyst, said in a report.
Copper futures for July delivery fell 20.2 cents, or 6.4 percent, to $2.932 a pound on the Comex in New York, the biggest decline for a most-active contract since Feb. 17, 2009. In London, aluminum, zinc, lead and nickel also declined.
The dollar climbed to the highest level since March 2009 against a basket of major currencies. The CRB index has dropped 11 percent this year.
'Under Real Pressure'
"Commodities are under very real pressure as the dollar continues to strengthen, and no one should be at all surprised," Dennis Gartman, a Suffolk, Virginia-based economist and hedge-fund manager, said in his Gartman Letter.
Crude-oil futures for June delivery dropped 2.1 percent to $70.08 a barrel on the New York Mercantile Exchange, after touching $69.27, the lowest level since Dec. 14. Gasoline prices also dropped.
Grains, sugar and livestock declined. Gold was little changed, gaining 30 cents to $1,228.10 an ounce, after touching a record $1,249.70 on May 14.