The Bloomberg Commodity Spot Index climbed 1.3% to its highest level since 2014.
As Bloomberg notes, the rise in risk appetite was driven by expectations of mass vaccine use from COVID-19, as well as the ongoing process of transfer of power in the United States.
In particular, the prices of copper and oil are growing, which is recovering from the impact caused by lockdowns. Weather disasters and high demand in China contribute to the growth of prices for crop production.
The current dynamics indicate a radical change in the situation compared to the peak of the pandemic, when the price of WTI oil fell below zero due to overflow of oil storage facilities, and the cost base metals have dropped to their lowest in many years.
Analysts at Goldman Sachs note that the recent rise in commodity prices is just the beginning of a “longer structural bullish” trend in commodity markets. Bank of America experts, in turn, predict a “moderate” rise in prices in 2021 amid the global economic recovery.
On Thursday, the price of Brent crude for the first time since early March exceeded $ 50 per barrel. Amid progress in the development of vaccines against coronavirus, the futures curve has moved to backwardation, which indicates the expectation of growth in demand with limited supply.
Meanwhile, copper has risen in price by 70% from March level – to a high in more than seven years. This was fueled by a weakening dollar, as well as a shift to low-carbon energy sources, which is driving an increase in the use of metals for electronics and alternative energy equipment.
Soybeans and corn have recently jumped in value following droughts in South America and Europe , while China bought a large volume of US agricultural products. Wheat prices rose amid fears that Russia could restrict exports to contain the rise in food prices.
An exception to the general trend is gold, which has been depreciating in recent months as a “safe haven” asset amid news about the vaccine and the beginning of the transfer of power in the United States to Joe Biden. However, the annual growth in gold prices may be the highest in the last decade.