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.



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