London, 20 August 2011

Commodity prices have suffered in August as equities declined as measured by the 7.58% decline in the S&P GSCI on the back of an 11.57% decline in the S&P 500 as of the 18th. Year-to-date (YTD), the S&P GSCI ended August 18th with a decline of 2.76% compared to a loss of 8.15% for the S&P 500, according to Michael McGlone, Senior Director of Commodity Indices at S&P Indices.

The economic sensitive sectors, energy and industrial metals have led second half (H2) declines in the S&P GSCI while increasing financial asset volatility has continued to benefit the precious metals. The less economic sensitive agriculture sector has fared well in August as measured by the 3.29% monthly gain which lessened the YTD decline to 2.43%.

As of August 18th, the S&P GSCI Precious Metal Index was the only major sector index to post a YTD gain. As the relative value price spread between gold and all other commodities continued to widen, the disparity measured between the S&P GSCI Industrial Metals Index and S&P GSCI Precious Metals Index returned the 2008 lows indicating the economy is potentially already in a recession.

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