SINGAPORE, July 7 -- Commodities may extend the worst slump since 2008 this quarter after an advance in June proved short-lived, Barclays Capital said, citing trading patterns.
The Reuters/Jefferies CRB Index of 19 raw materials ended the second quarter with a decline of 5.4 percent, the most since the final three months of 2008, after the first quarter's 3.5 percent loss. The gauge may fall to 251, compared with 253.80 on July 6, and a break of that level may lead to further declines to near the 2010 low of 247.25 in July, Dhiren Sarin, Barclays' technical analyst said.
"The outlook is bearish for the CRB Index," London-based Sarin said in an interview. The trend "is likely to remain in play into this quarter as the market is caught within its weekly cloud and is still within a larger bearish channel."
The CRB Index had risen for three consecutive weeks in June before declining 4.2 percent last week, the most in two months. A drop back below the "open gap" at the 256/258 level formed in June signaled at a reversal in the trend, Sarin said.
Raw materials from zinc to soybeans have slumped this year on concern that Europe's sovereign-debt crisis may harm economies. Crude has slid 9.1 percent this year in New York, soybeans fell 14 percent in Chicago and zinc tumbled 28 percent in London.
In technical analysis, investors study charts of trading patterns to predict changes in prices.