Articolo

Monthly commodities update

Invesco monthly commodities update

Key drivers of commodity returns

Commodities performed well in March, led by a surge in precious metals prices, with the Bloomberg Commodity Index returning 3.3% for the month and taking commodities back into positive territory year-to-date (+2.2%). While much of the focus was on the gold price hitting new all-time highs during the month and oil rallying, all commodity sectors provided positive returns, with the exception of livestock which struggled having been the only sector that had a positive return in February. For a deeper dive into the performance of gold, please see our monthly gold article.

Commodity sector returns March 2024
Commodity sector returns March 2024

Source: Bloomberg, Invesco as at 29 Mar 2024

Longer term histories for oil and gold

Gold futures rallied by 9.1% in March, hitting new closing highs seven times during the month before ending the month at $2,230 per ounce. Real yields were slightly lower while the US Dollar was slightly stronger during the month.  There appeared little change to geopolitical tensions which makes the gold rally difficult to explain, particularly as it was accompanied by selling of gold-backed ETPs.

Gold price ($/oz)
Gold price ($/oz)

Source: Bloomberg, Invesco as at 29 Mar 2024

The oil price also rallied during March, helped by OPEC+ cuts, strong demand and ongoing geopolitical tensions in the Middle East, but still remains broadly in the middle of the recent trading range.

Oil price ($/barrel)
Oil price ($/barrel)

Source: Bloomberg, Invesco as at 29 Mar 2024

  • Energy

    The oil price rallied strongly during March, helped by a combination of OPEC+ production cuts, strong demand and ongoing geopolitical tensions in the Middle East and Russia/Ukraine. The OPEC+ cuts, which are due to be implemented during the current quarter, appear likely to drive the crude oil market from surplus to deficit which is causing some forecasters to increase their oil price target. Meanwhile, natural gas prices continued to fall due to warmer weather and storage being considerably above average. 

    Energy – March 2024
    Energy – March 2024

    Source: Bloomberg, Invesco as at 29 Mar 2024

  • Precious metals

    Precious metals rallied strongly in March. While gold was the main focus as it made several new all-time highs during the month, Silver was actually the strongest performer, closing up 9.8%. while Gold* was a close second within precious metals space, rallying by 8.1% based on LBMA prices. Palladium (+6.8%) also performed strongly while Platinum (+2.3%) lagged but still produced a positive return.

    (*please note that while the LBMA PM closing prices showed gold up by 8.1% in March, gold futures ended the month slightly higher with a return of 9.1% for the month)

    Precious metals – March 2024
    Precious metals – March 2024

    Source: Bloomberg, Invesco as at 29 Mar 2024

  • Industrial metals

    While industrial metals posted a positive return for the month in aggregate, there were mixed fortunes for the individual metals themselves. Copper and Aluminium both performed well with potential cuts to Chinese copper smelting capacity due to the collapse in refining revenue, along with a couple of positive research notes from investment banks, as the main reasons for the rally in Copper. Lead and Zinc performed strongly early in the month, partly due to Korean production cuts and tight smelter capacity, before giving up those gains as a downturn in demand has led to surpluses having to be warehoused. Nickel however performed poorly in March.

    Industrial metals – March 2024
    Industrial metals – March 2024

    Source: Bloomberg, Invesco as at 29 Mar 2024

  • Grains, softs & livestock

    Wheat underperformed in the grains sector, selling off early in the month as China cancelled import shipments, before recovering some of the losses as planting is now expected to be lower this year on the back of that weakening Chinese demand. Corn rallied on short covering as farmers are also set to plant less in the current low-price environment with Soybeans also up as hedge funds reduced their net short positions. 

    Grains, softs & livestock – March 2024
    Grains, softs & livestock – March 2024

    Source: Bloomberg, Invesco as at 29 Mar 2024

  • Commodity ETP Flows

    Commodities ETPs continued to see net outflows (-$2.0bn) during March. Unsurprisingly, gold (-$2.9bn) saw the heaviest sales as investors took profits into the rally as new all-time highs were hit several times during the month. Silver (+$0.9bn), on the other hand, saw strong demand, potentially due to it having underperformed gold in the first two months of 2024. Other single commodity ETCs saw net sales of $0.6bn, with the $1.0bn of net sales of Oil products being partially offset by $0.3bn investment into Copper.

    Commodity ETP flows – March 2024
    Commodity ETP flows – March 2024

    Source: Bloomberg, Invesco as at 29 Mar 2024

Investment risks

  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important information

  • This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security, or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

    Data source Invesco/ Bloomberg as at 29 March 2024 unless otherwise stated

    Views and opinions are based on current market conditions and are subject to change.

    Israel: This document may not be reproduced or used for any other purpose, nor be furnished to any other person other than those to whom copies have been sent. Nothing in this document should be considered investment advice or investment marketing as defined in the Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 1995 (“Investment Advice Law”). Neither Invesco Ltd. nor its subsidiaries are licensed under the Investment Advice Law, nor does it carry the insurance as required of a licensee thereunder.

    EMEA3508818/2024