The rout in commodities deepened with prices touching the lowest since 2002 as the prospect of higher U.S. interest rates sent gold tumbling.

Raw materials are losing favor with investors as the dollar gains amid signals from Federal Reserve Chair Janet Yellen that the central bank may raise rates this year on the back of an improving U.S. economy. Higher borrowing costs curb the attractiveness of commodities such as gold, which doesn’t pay interest or give returns like assets including bonds and equities.

The Bloomberg Commodity Index dropped as much as 1.4 percent, falling for a fifth day in the longest stretch of declines since March. Gold futures sank to the weakest in more than five years while industrial metals, grains, Brent crude and U.S. natural gas also slid as a measure of the dollar climbed to the highest since April 13.

David Fuller's view

Expectations for global GDP growth are cautious for the second half of 2015, not least because of slumping commodity prices.  However, growth could also improve given stimulative monetary policies and cheaper energy prices at least six-and-a-quarter years after the worst credit crisis recession since the 1930s.  It usually takes at least this long for economies to recover from a cycle of extensive corporate and private deleveraging, leading to falling tax revenues, as we have been seeing.