In further evidence of the deteriorating commodities market, the S&P TSX Venture index dipped well below 2,000 for the first time since September 13, 2005. In that year, the market bottomed in May just under 1600 points before going on to set a then all-time record high of 3309.

The U.S. dollar rally is largely to blame, as the improving greenback renders all commodities expressed in USD more expensive to hang on to. Increasing concerns over the softening economic growth in BRIC countries has compounded the fears prompting the sell off in gold, oil, copper, nickel and agricultural softs.

The price of copper is especially bearish as the price is dropping even as global supply is suffering from interruptions at both the Chilean state mining company CODELCO, who reported an 11 per cent slide in output to 715,000 tonnes during the first half of 2008, and from Grupo Mexico, who is still embroiled in a year-long strike at its Cananea mine.

Copper cathode production worldwide is being adversely affected by a shortage of sulphuric acid, used in the leaching process. Freeport McMoran (NYSE:FCX) has reduced its output forecast by 100 million pounds of copper because of the acid issue and start-up delays at the new 110,000 tonner per year Safford mine in Arizona.

Platinum has seen frenzied selling taking the metal down to $1460 an ounce, more than 35% off Its record high of $2290 set in February this year. A slumping global auto manufacturing sector is blamed where it is used in catalytic converters to reduce emissions.

It would appear that the market still has a lot of negative direction left in it as the summer doldrums lurch forward causing pain to many junior companies who are running out of money. Orex Minerals (TSX.V:REX), First Star Resources (TSX.V:FS), Minterra Resources (TSX.V:MTR) among many others, have announced the cancellation of financings citing "market conditions".

China's car market, the world's second largest, is losing speed more quickly than expected due to a slowing economy, rising fuel prices and natural disasters, raising the prospect that sales growth could halve this year.

Growing by at least 20 percent a year for the past three years, China has been one of the few bright spots for General Motors Corp and other global auto giants as they struggle with a slump in U.S. and European markets.

But sales growth in July slowed to a single-digit rate for the first time in two years. This may be the shape of things to come, even with a renewed focus on growth by China's economic policy makers.

"It's slowing down more than we anticipated," said John Bonnell, director of J.D. Power Asia Pacific Forecasting.

The fact that Chinese car owners are facing increased gasoline prices for the first time since oil jit $147 in July isn't doing the cooling Chinese economy any favours either. Fuel prices there have increased by 20%, whereas historically consumers have been shielded from rising energy costs by state-set price ceilings.

At this point, J.D. Power is still forecasting 10-11 percent annual growth in China's car sales until 2012. But Bonnell said there was about a 30 percent chance of little or no growth in sales in 2009 or 2010, if the economy slows further.