Resilience of industrial commodity prices reassuring

Given the negativity in global equity markets, the relative stability of industrial commodity prices (especially metals) over the last few weeks has been reassuring. Even Brent crude, while slipping back again in the past week, is at least still above its January lows. Indeed, the slump in equity prices seems to be largely detached from economic reality, as shown in the divergence between stock markets and composite measures of global economic activity. Of course, it is still possible that the turmoil in the financial sector will drag activity down. However, the resilience of commodity prices may itself be evidence that economies are not collapsing.