Live Markets: Commodities almost outshine AI, but risks loom
LIVE MARKETS-Commodities almost outshine AI, but risks loom Adds new blog entry
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COMMODITIES ALMOST OUTSHINE AI, BUT RISKS LOOM
Commodities have done well this year, benefiting from a mix of drivers, from fiscal concerns and weather-related disruptions to conflict and geopolitical fragmentation.
Ole Hansen, strategist at Saxo, recalls that the commodity index gained 26% this year, outperforming the S&P 500 and keeping pace with Nasdaq despite the extraordinary attention surrounding the AI-driven equity rally.
However risks are looming after recent gains.
“El Niño-related crop losses are still a risk rather than a certainty, “ Hansen says after arguing that agricultural markets are being driven primarily by supply factors linked to weather and conflicts.
Meanwhile, “Record copper prices will encourage substitution, recycling and eventually additional production,” he adds.
“An agreement that allows the Strait of Hormuz to reopen could trigger another sharp oil correction, while still-elevated interest rates remain a potential challenge for precious metals.”
”The forces supporting commodities are very different, but increasingly interconnected: monetary and fiscal uncertainty, physical supply constraints, strategic stockpiling, weather disruption and geopolitical fragmentation,” Hansen argues.
(Stefano Rebaudo)
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