Could a rout in gold, copper prices at their lowest since the financial crisis - plus a glut of crude - raise the spectre of deflation and stymie U.S. and UK plans for rate hikes? David Pollard reports.
Oil prices - on course for their biggest monthly drop since March. And they could just go on going down. Iran's nuclear deal with the West, a slowing China and, next year, the prospect of demand slipping from 1.4 million barrels per day currently to 1.2 million, according to the IEA, all weighing on crude. Other commodities traveling down with it. IHS Global Insight's Jan Randolph. (SOUNDBITE) (English) JAN RANDOLPH, DIRECTOR OF SOVEREIGN RISK AT IHS GLOBAL INSIGHT, SAYING: ''Commodities have dovetailled more or less where oil has gone, not as bad, but it is following suit, and it is of concern to a lot of the commodity exporters out there.'' It's prompting some in the markets to talk again about deflation. The US and UK - they're heading towards their first rate hikes in over half a decade, according to recent signals from Janet Yellen at the Federal Reserve and her Bank of England peer, Mark Carney. Low to no inflation in both economies not enough, it appears, to undermine the case for hikes. With central banks desperate for the private sector to push growth. (SOUNDBITE) (English) JAN RANDOLPH, DIRECTOR OF SOVEREIGN RISK AT IHS GLOBAL INSIGHT, SAYING: ''What we need is real demand to start stoking inflation. As long as inflation is veering away from deflation and heading towards our targets, 2% typically, then we have a good indicator that we can hand over the baton from central banks to the private sector.'' Some traders have dubbed gold's fall on Monday a mini 'flash crash'. Prices at one point dropping four per cent. And copper too has lost much of its shine. Its price hitting its lowest level in six years - on dollar gains and, again, concerns over China, the world's biggest consumer. (SOUNDBITE) (English) JAN RANDOLPH, DIRECTOR OF SOVEREIGN RISK AT IHS GLOBAL INSIGHT, SAYING: ''Commodity prices will stabilise, there'll be weakness in certain markets, but I don't think there'll - we won't enter another boom period, I don't think.'' The boom of the noughties - the so-called commodities super-cycle - well and truly over, it appears. And no sign it'll reappear any time soon.