US oil fell below $50 a barrel and gold traded near a five-year low after a selloff that’s seen commodities slide to the lowest in 13 years. The dollar held gains, while most Asian shares climbed.
West Texas Intermediate oil fell 0.3 percent to $49.98 a barrel by 1 p.m. in Tokyo, while gold futures retreated 0.4 percent for a ninth straight decline.
The dollar held near a three-month high against the euro, while the yen touched its weakest in a month. The MSCI Asia Pacific Index edged higher with most stocks climbing, and the Topix index rose 0.3 percent. US stock futures were little changed.
The outlook for precious metals and oil prices has soured as the strengthening of the US economy pushes the Federal Reserve toward boosting interest rates for the first time since 2006.
Gold slid the most in two years during 15 minutes of Asian trading Monday as the dollar held onto recent gains. Australia’s central bank said weaker commodity prices probably dragged on first-quarter growth as the country’s currency remained too strong.
“Commodities are going to face a lot of headwinds,” said Fross & Fross Wealth Management President Thomas Fross in an interview. “Gold is a really big insurance policy against a declining dollar and a declining economy, and we’re not looking at either of those. As the Fed raises interest rates we think it’s going to force more people out of fixed income and into the equity market.”
The Bloomberg Commodity Index slid 0.1 percent after closing at its lowest level since June 2002 on Monday amid selloffs in crude to precious metals, crops and sugar. Gold, the most heavily-weighted commodity in the gauge, traded at $1,103.64 an ounce in the spot market.
The metal for immediate delivery slumped as much as 4.2 percent Monday to the lowest price in more than five years.
Other precious metals also extended losses, with platinum and palladium futures falling at least 1.2 percent and contracts on silver dropping 0.2 percent.
Copper was little changed at $5,476 a metric ton in London, while nickel fell 0.5 percent to $11,645. Wheat futures retreated 0.5 percent, extending declines near its lowest price in almost a month.
The Bloomberg Dollar Spot Index was little changed at a four-month high following four days of gains. The Korean won weakened 0.6 percent, while the euro traded at $1.0828, close to its lowest price since April. The dollar bought 124.37 yen, close to the weakest since June 17.
The dollar gauge, which tracks the greenback against 10 major peers, has climbed 2.5 percent this month, as concerns abated that financial events in China and Greece might threaten global growth and discourage Fed rate increases.
“We’ve seen a resumption of a rally in the dollar, and if you do the math, that’s bad for commodity prices,” said Peter Sorrentino, a Cincinnati-based fund manager at Huntington Asset Advisors Inc., which oversees $1.8 billion. “The implications there for the hard-asset part of the global economy is pretty abysmal looking out to the rest of the year.”
New Zealand’s dollar strengthened 0.4 percent to 65.94 U.S. cents after data showed net immigration in the year through June climbed to a fresh record. Dairy prices may recover by the end of the year, Finance Minister Bill English told reporters Tuesday, according to Interest.co.nz.
In the stock market, transportation shares drove gains in the Topix, while Japan’s Nikkei 225 Stock Average climbed 0.6 percent in its first day of trading this week.
Australia’s S&P/ASX 200 Index rose 0.3 percent for a sixth day of gains, while the Kospi index in Seoul fluctuated.
The Shanghai Composite Index swung to a gain of 0.3 percent after falling as much as 2 percent. The benchmark for China’s biggest venue capped a three-day, 4.9 percent advance Monday.
A total of 543 companies were suspended from trading just after the open on mainland Chinese exchanges Tuesday, or 19% of all listings, down from 576 at the close Monday.
The Hang Seng China Enterprises Index in Hong Kong increased 0.6 percent.