MENU
 Registered users can save articles to their personal articles list. Login here or sign up here
 Registered users can save articles to their personal articles list. Login here or sign up here

Metals enjoy longest rally in seven years as low rates lure cash

Aluminum, lead and silver gain more than 14% in first quarter.

Metals were one of the best investments in 2016, and that’s turning out to be true again this year.

An index of the six major metals rose for the fifth straight quarter, the longest stretch of gains since 2010. Gold is up 8.8%, the best performance in a year. For comparison, global equities are up about 6% for the quarter.

More money is flowing into commodities as investors search for investments that can keep up with faster inflation, and metals such as copper face supply shortages. The weaker dollar and lower inflation-adjusted yields, also known as real yields, have made alternative assets more appealing.

“With real rates as low as they are across markets, it’s obviously very attractive to park your dollars in the commodities, which have been under-performing in recent years,” Sanjay Saraf, the head metals market analyst at S&P Global Market Intelligence in London, said by phone.

Other quarterly highlights:

  • Palladium jumped 17%, reaching the highest price since March 2015
  • Aluminum added 16%
  • Lead rose 16%
  • Silver advanced almost 15%

The strength in metals contrasts with weaker performance from energy and agricultural commodities.

West Texas Intermediate crude sank about 6% in the quarter, the biggest drop in more than a year. Raw sugar futures dropped 14%.

“Oil has been softening, but supply tightness has been driving metal prices up,” said Casper Burgering, an economist at ABN Amro Bank NV in Amsterdam.

© 2017 Bloomberg

   No comments so far

To comment, you must be registered and logged in.

LOGIN HERE

Don't have an account?
Sign up here

Latest Currencies

ZAR / USD
ZAR / GBP
ZAR / Euro

MARKET INDICATORS

JSE ALSI
DAX
CAC40
NasDaq
Gold / oz
Silver
Platinum / oz
Brent
Rand/Dollar
Rand/Pound
Rand/Euro
Dollar/Euro

MONEYWEB NEWSLETTERS

Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Podcasts

Moneyweb Investor Issue 25

If the world's best investment managers, who came together at a recent CFA conference, cannot figure whether a crash or correction is looming, ordinary investors can be forgiven for their hesitation. Thus the June issue of The Moneyweb Investor does its best to fill the gaps. With 17 stories and a podcast, you wouldn't want to miss it.

Follow us:

Search Articles:Advanced Search
Click a Company:
server: 172.17.0.2