Here is a small crumb of comfort for consumers in Hong Kong still reeling from the news that they are paying 7 per cent more for utilities including gas and electricity than a year ago and almost 20 per cent more for food: there are signs the upward pressure on food and energy prices may be easing. Unfortunately, what is good news for consumers may be troubling for investors. In recent years few investment stories have been as compelling as the bull market in commodities. A parade of gurus argued with great authority that commodity prices were destined to soar over the next couple of decades. Frequently they cited convincing statistics to back up their view. For example, they would say that the average Chinese person consumes just two kilograms of copper. In contrast, his American counterpart uses up 10kg. So, as China's economy becomes wealthier, Chinese people will consume more copper, driving global prices sharply higher. The argument did not just apply to copper. It worked equally well for oil, gold and soya beans, even humble coal - almost any commodity you could think of. And judging by the way commodity prices behaved on world markets, it looked like the gurus were right. The price of copper rose more than 500 per cent in five years. Soya beans tripled in price, and between late 1999 and last week, the price of crude oil rose tenfold (see chart). But along the way, something happened which left commodity analysts feeling very nervous. The gurus had preached the virtues of commodities as an instrument of diversification and a hedge against currency decline so successfully that investors, led by hedge funds, poured tens of billions of US dollars into the asset class. Suddenly, prices were no longer rising because of growing consumer demand, they were being pushed higher by the flood of speculative money entering the market. In short, there was a commodity bubble. That bubble may now be bursting. In the last week, investment funds have begun cashing out of their positions in commodity markets. They are selling partly because they fear that an economic slowdown in the developed markets will erode underlying demand. But they are also scaling back their exposure to commodities as they reduce overall risk and leverage in response to the deepening financial crisis that triggered last week's collapse of investment bank Bear Stearns. The sell-off has been almost as spectacular as the bull market. In the last week, the price of oil has fallen by 9 per cent. Gold is down 8 per cent. And soya beans are down a thumping 22 per cent in a little over two weeks. Many commodity watchers are predicting further falls. Hugo Navarro at Capital Economics in London, for example, is forecasting that a combination of slower demand growth and rising capacity will knock another 20 per cent off the price of crude oil by the end of next year. None of this negates the gurus' argument that rising increased consumption by developing economies will push up prices over the long term. But commodity prices had got ahead of the underlying demand. A correction is welcome.