Commodity prices retreated Tuesday, taking a cue from currency-market response to the U.K. economy’s surprise contraction.
Both industrial and agricultural commodity prices were hit by the selloff, with natural gas, copper, coffee and rice futures all down more than 2%. Palladium was off more than 4%.
“A lot of it is panic selling,” said Bob Haberkorn, senior market strategist with Lind-Waldock in Chicago.
Fueling the flight from relatively risky assets was the announcement that the U.K.’s economy contracted 0.5% in the fourth quarter of last year, well below economists' expectations of a modest expansion. On a year-over-year basis, the economy grew 1.7%, which also fell far short of economists' expectations of 2.6% growth.