Commodities overall lower as U.S. dollar advanced

Commodities across the board fell on Thursday as the dollar erased earlier losses during the week and strengthened versus all major counterparts following Bernankes statement on Wednesday. The Standard & Poor’s GSCI Index of 24 raw materials lost 2% today, the biggest intra-day loss since May 10. Meanwhile, further manufacturing slowdown in China was forecast by the preliminary HSBC Purchasing Managers Index. It stood at 48.3, which, if confirmed, will be the lowest since September. It mismatched a 49.1 forecast by a Bloomberg News survey and is worse than May’s final value of 49.2.

Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said by e-mail for Bloomberg: “What we are seeing is a broad sell-off across all commodities, led by precious metals. ”

Gold fell below $1 300 an ounce today. Gold futures for August delivery hit a 2 1/2-year low at $1 285.25 an ounce. Meanwhile silver plunged even further. The worst performing metal this year dropped to a 33-month low. The metal fell more than 8% today, hitting a session low at $19.658.

Platinum and palladium performed slightly better. Platinum for July delivery was down only 2.75% at 14:07 GMT, while palladium September futures tumbled 3.76% on the day.

Copper also fell as the greenback strengthened and Chinas flash HSBC PMI showed further manufacturing slowdown. Copper lost 2.25% on the day by 14:04 GMT, trading at $3.070 a pound. The industrial metal hit a two-month low touching $3.056 earlier during the European session.

Grain futures lost an average of 1% today as dollars strength weighed, but also favorable weather conditions supported crop development in the U.S. This, coupled with overall increased production from Australia, Europe and the Black Sea region, kept wheat, corn and soybeans in bearish trend.

Meanwhile, soft futures lost an average of 2% today by 12:10 GMT. Apart from being pressured by the stronger greenback, robusta and arabica crop outlook kept pointing at ample supply as good weather aided development in the two main coffee growers – Brazil and Vietnam. Sugars gain from yesterday was also erased. The sweetener rose 2.1% on Wednesday as rising demand for ethanol, made Brazil millers use more cane for biofuel instead of the sweetener, 58% compared to 52% last year.