Commodities broadly tumbled on Friday as the dollar strengthened in the wake of growing inflation worries.

The return on commodities as measured by the 23-member Bloomberg Commodity Index dropped the most since April as a strengthening dollar reduced the appeal for raw materials priced in the currency. Meanwhile, a surge earlier this week in U.S. government bond yields has fed into increasing concerns that accelerating inflation could lead to easing monetary policy support.

“No one expected a bond market rout, and it’s very much disrupting everything,” said Edward Moya, a senior market analyst at Oanda Corp. “We’re seeing a complete unwind of risky assets. The movement right now is a panic-selling across the board.”

The plunge comes after hedge fund bets on rising commodity prices set a record for the fifth week in a row in data going back to 2011, according to a Bloomberg analysis of data from the Commodities Futures Trade Commission and ICE for 20 raw materials. A number of investment banks have recently called for commodities entering a new structural bull cycle, with some even saying it could be the start of a supercycle. But the spike in U.S. yields on Thursday is stoking concern that the accommodative monetary approach that helped fuel the recent price gains may not last, despite central banks’ indication otherwise.

Meanwhile, the losses in individual markets are being accentuated by their own idiosyncratic factors.

Oil and Gas

Oil fell the most since November in New York, denting its best start to the year on record. Alongside the strengthening dollar, expectations that OPEC+ will return some supply to the market are also weighing on prices. While the producer alliance is widely anticipated to ease output curbs, uncertainty remains over how much production will come back and whether demand will be strong enough to absorb it.

Natural gas on Friday fell for the seventh straight day, making it the longest losing streak since October 2019. Futures have slumped almost 14% since a Feb. 17 peak, fully erasing the gains associated with the frigid weather that last week forced gas wells in Texas to shut and wreak havoc in energy markets. Production has quickly rebounded amid rising temperatures, while demand for the heating fuel slumped by a fifth over the past week.

Metals and Agriculture

Copper slid the most since October on Friday, falling from a nine-year high. Gold extended declines, heading for its worst month since late 2016.

Copper, considered an economic bellwether, had neared a record high set a decade ago on bets that rebounding economies and central bank support will further tighten supplies. While some analysts and traders say prices could climb much higher, the sharp increases in the past week and news that a shortage of semi-processed materials is set to ease as more supplies are heading to China may also have left copper vulnerable to correction.

Investors are getting worried that faster inflation could trigger a pullback in stimulus support, though Federal Reserve officials have stressed that there are no plans to tighten policy prematurely. For gold, higher yields and optimism over the recovery have dented the haven’s allure.

Grain and soybean futures in Chicago retreated from recent surges as market bulls took a pause amid signs that high prices may be starting to curb demand. Soaring Chinese imports and global weather concerns had driven the futures to multi-year highs. Prices tumbled Thursday and Friday after weekly U.S. export sales that came in far below analysts’ expectations.

— With assistance by Michael Roschnotti