Commodity prices fall due to recession
On Tuesday, crude oil fell by about $ 10, gold fell by more than $ 50 and the price of silver fell by about 6 percent. Many other commodity prices have also fallen
after long time Crude oil ,crude oil) prices have appeared back in double digits. Crude oil had slipped below $100 a barrel on Tuesday itself. During the trading, the price of crude oil has fallen by 9 percent. On the other hand, there has been a fall in the prices of palm oil in Malaysia. Industrial metals such as copper, steel, and nickel (Metal price) continues to decline. After these signs, it seems at first glance that the challenges that have arisen for the Indian economy in 4 months have suddenly started coming to an end. and inflation (inflation) The fear seems to be going away now. So what a bad time has passed. Will the demand increase now. Probably not. Due to the decrease in prices in the market, inflation is expected to decrease, but the experts are afraid about the reason behind it.
The sound of recession increased the concern
The sudden sell-off in the commodity market is being considered as a sign of deep recession. And if the recession prevails in the economy, then the situation can get worse. Earlier in the year 2008, the whole world has already seen a glimpse of this recession. In such a situation, the commodity market is scared because of the situation like 2008 once again. That year also there was a huge fall in gold, silver and crude oil from record highs. Due to this fear, crude oil declined by about $ 10 on Tuesday. Gold fell by more than $ 50 and the price of silver has fallen by about 6 percent. There was heavy selling in copper, aluminum and zinc and the prices of wheat, palm oil, cotton and soybean also declined in the international market. In fact, market experts believe that if the recession dominates, then the demand for commodities will be badly affected, and this fall in commodities is being seen by the market experts as a sign of recession.
What is expert opinion
Ajay Kedia, director of Kedia Advisory, believes that even in normal circumstances, the prices of commodities keep fluctuating, but when the recession dominates the economy. Then there is a temporary decline in all the commodities together, as it happened in 2008. According to him, something similar is being seen this time too. Central banks around the world are raising interest rates to control inflation. Central banks also know that expensive loans kill demand, and if the balance between credit and demand is disturbed, it does not take long for the economy to reach the door of recession. But in the current situation, the central banks are finding inflation a big challenge. And to defeat this challenge, central banks are also ready to face recession for a short time. But if the balance is disturbed, recession can become a bigger challenge and in such a situation the reduced prices of commodities will not be of much help.