The sharp falls in commodity prices in the third quarter illustrate the importance of macroeconomic and financial market factors on the demand side, which once again have more than offset the perceived tightness of supply. A substantial rescue package for the euro and an easing of monetary policy in China might allow a short-term bounce in prices, led by industrial metals. But we would still expect fresh falls in 2012 as global economic activity remains sluggish, risk appetite stays fragile and the dollar recovers more ground. Gold is the main exception and should reach new highs if, or when, the crisis in the euro-zone escalates again.