NEW YORK-"The sky is falling! The sky is falling!" That's what copper traders must be thinking today, as prices plunged more than seven per cent amid mounting fears that the global economic slowdown may turn into an outright recession. Copper prices are closely followed as a key predictor of the economy since the base metal is used to manufacture goods ranging from cars to plumbing pipes.
In the past two months alone, prices have plummeted more than 20 per cent, putting copper into bear market territory, which is pretty much a blinking red light for the global economy. "We're seeing a knee-jerk reaction, as if the world is coming to an end," said Paul Simon, chief investment officer of Tactical Allocation Group. On Thursday, prices sank 7.3 per cent to $3.49 per pound. Other commodities also plunged. Crude oil prices tumbled 6.3 per cent to about US$80.51 a barrel, while silver dropped nearly ten per cent to US$36.58 an ounce.