Commodity prices are again on an uptrend with the S&P GSCI up around 10% YTD in 2024 after declining -4% in 2023 and -19% in 2022 from its peak level in June in response to the Russia-Ukraine war which choked supply chains and sent commodity prices spiraling. The rally this time has been led by industrial and precious metals, which have each gained 17% YTD.

 

The overarching factors for such outperformance are:

  1. Growth: Global industrial production has recovered, impacting the macroeconomic outlook in Eurozone and China. U.S. economic growth is proving to be resilient.
  2. Green energy transition: The transition to renewable energy ensures robust demand for commodities in the near and longer term.
  3. Geopolitical risks: The continuing hot war in Ukraine and an expanding conflict in Middle East are driving safe-haven inflows into precious metals and causing supply concerns in industrial metals.

 

In this CIO Viewpoint Commodity - Metals: the three Gs driving metals, we provide a deep-dive and expand into the individual dynamics of iron ore, copper, platinum, silver and gold.

 

Key takeaways:

  • The commodities rally this time has been led by industrial and precious metals, which have each gained about 17% YTD.
  • A recovery in global industrial production led by Eurozone and China, coupled with ongoing green transition measures, augur well for the industrial metals complex while precious metals should continue to outperform amid rising geopolitical risks.
  • Since prices have rallied significantly for some commodities, we may see a bit of a consolidation in the near-term, but the medium-term outlook remains bullish and short-term price corrections can be used to add exposure.

'

The CIO Viewpoint below is available to download. Please refer to the Important Information at the end of the memo for disclosures and risk warnings.

PDF

Language:

Related special reports

See more

In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Performance refers to a nominal value based on price gains/losses and does not take into account inflation. Inflation will have a negative impact on the purchasing power of this nominal monetary value. Depending on the current level of inflation, this may lead to a real loss in value, even if the nominal performance of the investment is positive. Investments come with risk. The value of an investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.

Change of name: As part of Deutsche Bank’s Private Bank, the former International Private Bank also adopted this title on July 20, 2023.

The content and materials on this website may be considered Marketing Material. The market price of an investment can fall as well as rise and you might not get back the amount originally invested.  >The products, services, information and/or materials contained within these web pages may not be available for residents of certain jurisdictions. Please consider the sales restrictions relating to the products or services in question for further information. Deutsche Bank does not give tax or legal advice; prospective investors should seek advice from their own tax advisers and/or lawyers before entering into any investment.

 

×