The commodity slump that spurred bear markets in everything from gold to corn to sugar this year will deepen by the end of December as prices head for their first annual loss since 2008, if history is any guide.
Gold will probably extend its decline through 2014, even as the commodity super cycle that’s brought longer-than-average rising prices may persist for a further two decades, according to Societe Generale SA.
The biggest rally in commodities in a year may stall in the fourth quarter as supply of everything from copper to corn expands, tensions in the Middle East ease and the Federal Reserve refrains from tapering stimulus as it seeks more evidence of sustained growth.
Copper will extend a bull run as “mammoth demand” from China, the largest user, and supply constraints combine to drive the market into a deficit from next year until 2014, according to Standard Chartered Plc .
Gold fell for the first time in a week as signs of gains in the U.S. economy boosted speculation that the Federal Reserve will scale back monetary stimulus, while the dollar’s rally eroded the appeal of the metal.
Raw sugar prices traded in New York may fall to 18 cents a pound in the “near term,” a level at which millers in top producers Brazil would make more ethanol at the expense of the sweetener, according Societe Generale SA.