Commodities Drop 10.5% in June, Second Straight Monthly Decline

Commodities fell 10.49% in June, their second consecutive monthly decline. May's drop was 7.53%. The back-to-back losses mark the worst two-month stretch for the Bloomberg Commodity Index since the pandemic-era selloff in early 2020.

The selloff was broad. Energy and industrial metals led the decline. Agriculture also posted losses, though less severe. The dollar strengthened in June. That added pressure on dollar-denominated commodities, making raw materials more expensive for holders of other currencies.

For traders, the question is whether this is the start of a sustained downtrend or a correction within a longer-term bull market. The answer depends on the next few data points: the July Fed meeting, where rate expectations could shift, and the OPEC+ production decision later this month.

Gold, which typically benefits from a weaker dollar and falling real yields, failed to act as a safe haven. It fell alongside risk assets, a sign that liquidation pressure was broad. Gold profile

The commodity complex is now at a critical juncture. A third straight monthly decline would confirm a trend change. The next catalyst is the US jobs report on Friday, which will set the tone for the dollar and rate expectations.

For a broader view of commodity trends, see our commodities analysis.