Commodities Prices

Global commodity prices jumped 4.3% month on month in August. This came on the heels of July’s 3.5% increase and marked the strongest upturn since April 2023.

The acceleration was driven by a faster increase in energy prices. Prices for all energy commodities tracked by our panel of analysts jumped mid-way through Q3, with the exception of coking coal. Prolonged crude oil output cuts by Russia and Saudi Arabia further tightened global supply conditions, which, in turn, boosted prices for crude oil and its derivatives. Meanwhile, seasonal travel and rising services activity supported energy demand. Elsewhere, the picture was far less rosy. Prices for agricultural commodities, base metals and precious metals all plunged in August. Both base and precious metals prices swung to contraction in August due to downbeat global demand stemming from worsening prospects in China and cooling industrial activity in the U.S. and the Eurozone. Notably, China’s underwhelming policy response to slowing growth hurt industrial metal prices. Meanwhile, higher interest rates in the U.S. and increased yields on U.S. Treasuries hurt the attractiveness of precious metals as non-interest-bearing assets. Lastly, agricultural prices contracted for the second month running due to weaker demand prospects.