July was a terrible month for commodities. Aside from all the drama in Greece, the ugliest headlines we saw were from commodities. Here's a quick recap of some of the big stories: Crude oil closed off its worst monthly decline since October 2008, falling more than 20%. In seconds, gold flash crashed to a five-year low. The precious metal has continued selling off and has struggled to rebound above $1,100 an ounce since the plunge on July 19. Copper somersaulted to a six-year low at around $2.385. Goldman Sachs analysts had been bearish the metal Iron ore went into free-fall. In a note to clients Monday, Deutsche Bank's Jim Reid sums up why we saw all of this carnage: "July proved to be an eventful month for markets (and volatile for some) as we saw a diverging performance between [developed markets] and [emerging markets]. The carnage in China and commodities was a key highlight in otherwise what was a fairly positive month for DM credit, rates and equities ... "Demand for commodities is generally closely correlated to EM growth. So with concerns of China and Brazil slowing down, the moves in commodities are perhaps not surprising even though persistent Dollar strength and the potential timing of a Fed liftoff have also likely weighed on the broader appetite for EM assets." It also didn't help that China's stock market was all over the place, closing down 14% for the month, even after authorities took several drastic steps to stem a decline. And just three days into August, it's shaping up to be another ugly month. On Monday, West Texas Intermediate crude oil was sinking towards its lows of the year, down more than 2% near $46.10 a barrel. Copper and aluminum prices also fell to the lowest levels in six years. Reid included this ugly chart, showing that commodities (and China's stock market) were clearly the laggards of of July. Join the conversation about this story »
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