Rally in commodity prices threatened by renewed geopolitical tensions
In May, global commodity prices increased for the second consecutive month, mostly reflecting a rise in oil prices and concerns about supply shortages for some agricultural products. Base metal prices continued to recover in May from the plunge in March due to fears of a full-blown global trade war. Conversely, precious metal prices were affected by the strong U.S. economy, which has caused demand for safe-haven assets to decrease. Early data for June suggests that the upward trend in commodity prices may have come to an end due to geopolitical factors and oversupply concerns in the oil market. Commodity prices rose an aggregated 0.9% month-on-month in May, following April’s 2.0% increase.
Further down the road, analysts foresee that falling prices for energy, especially for oil, will lead global commodity prices to post smaller gains. The Consensus view among FocusEconomics panelists is that commodity prices will increase 1.6% in annual terms in Q4 2019.
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Price forecasts and historical data for Energy, Metals and Agricultural Commodities