The commodity slump that spurred bear markets in everything from gold to corn to sugar this year will deepen by the end of December as prices head for their first annual loss since 2008, if history is any guide.
Gold, iron ore, soybeans and copper will probably drop at least 15% next year as commodities face increased downside risks even as economic growth in the U.S. accelerates, according to Goldman Sachs Group Inc.
Hedge funds cut bullish gold bets, adding the most short contracts in four weeks, as U.S. economic growth fuels speculation the Federal Reserve will trim stimulus. Holdings across commodities dropped the most since April.
Gold is down 22% year to date and looks set for the first annual decline since 2000. The last time that gold suffered such a poor year to date performance was in 2008. At the start of November 2008, gold was trading down 14.6% for the year.
Peter Schiff lays an iPod-sized bar valued at about $40,000 on the sun room floor of his Connecticut mansion, and calculates it would cost about $250,000 for each floor tile to pave the room with gold.