Business Week reported that prices for industrial metals have fallen after new reports showed sluggish manufacturing in the US and China adding to concerns about slowing growth in the world's two biggest economies. Copper, platinum, palladium and silver ended lower Wednesday.

The Institute for Supply Management said its index of US manufacturing remained below 50 for the second straight month in July which means manufacturing is contracting. Export orders fell to the lowest level since April 2009.

According to the state-affiliated China Federation of Logistics and Purchasing, China's manufacturing barely grew in July. It was the slowest growth rate in eight months. The US is the world's largest economy, followed by China. Slower growth in both countries means less demand for metals like copper, silver, platinum and palladium which are used in a variety of manufactured products.

Gold for December delivery fell USD 7.30 to end at USD 1,607.30 an ounce, September silver dropped 37.9 cents to USD 27.535 per ounce and September copper declined 4.25 cents to USD 3.375 per pound. October platinum fell USD 15.60 to finish at USD 1,401.30 an ounce and September palladium ended down USD 7.95 at USD 582.60 an ounce.

Other commodities were mixed after the Federal Reserve did not take immediate action to promote economic growth. But the Fed pledged again to approve additional measures if the job market fails to improve. The decision disappointed many traders. Prices for many commodities benefited during the Fed's previous bond-buying programs, which were designed to drive down long-term interest rates and encourage more borrowing and spending.

The low interest rates pressured the dollar, which weakened against other currencies. Commodities are priced in dollars, so a weaker dollar makes them more of a bargain for traders who use other currencies. In other trading, prices for wheat, corn and soybeans extended their losses for a second day.

Source - Business Week.com

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