Commodities posted the biggest monthly drop in a year as the sovereign-debt crisis in Europe and accelerating inflation in China fanned speculation that global economic growth will slow.
This month, the Standard & Poor’s GSCI Spot Index of 24 raw materials dropped 6.8 percent, the first decline since August and the biggest drop since May 2010. Silver led the slide, slumping 21 percent, followed by nickel, and crude oil slid almost 10 percent.
The gauge gained 1.2 percent today. Central banks raised interest rates to slow inflation, which climbed to a 32-month high in China, exceeding the government’s 4 percent target. In May, the euro dropped against the dollar, snapping a five-month rally, amid the region’s escalating debt woes.
“The May sell-off is a broad-based risk-averse move coming from a combination of concerns about Europe’s debt crisis, China’s inflation and U.S. data,” said Andy Kaleel, the chief executive officer of Sydney-based H3 Global Advisors Pty Ltd., which manages about A$600 million $642 million.