Commodity prices have rallied over the last three months and this has resulted in the highest level of the CRB index since 2015. Especially higher oil prices have played an important role. They have risen as speculators have anticipated even higher prices because of a tighter supply-and-demand balance and geo-political tensions. Agricultural commodities (also an important weight in the CRB index) have disappointed because of high stocks.
In Q1 we expect the rally in the CRB index to lose momentum as the risk of a sizable correction in oil prices is increasing and a dollar recovery should weigh on precious metal prices. Weakness in commodity prices is an opportunity to position for strength later in the year.
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