The last thing the commodities market, which is already feeling effects of a low demand from China, was expecting was to be exposed to another shock. Sadly, it has happened and with devastating consequences at that.
In a development which pro-Brexit British voters would have hardly imagined, the commodities market has been adversely affected by the UK’s decision to leave the European Union after four decades of membership.
According to Bloomberg, the value of commodities, which include copper and oil amongst others fell, in global market turmoil fell alarmingly as investors sold off growth-related assets including oil and copper and sought haven in precious metals.
A reaction from Kang Yoo Jin, a Seoul-based commodities analyst who talked to Bloomberg by phone summed it all: “It’s a big shock, the fear is spreading. Everything else in commodities except precious metals is getting slammed right now as the general expectation throughout this week was that Brexit won’t happen. Once markets open in the U.S., it could be a ‘Black Friday’ as there is a chance that prices will be hit harder.”