This year has been good for commodities, with palladium leading the way with a gain of nearly 60 percent. The precious metal has continued to notch new highs, stealing the spotlight from cheese and milk prices.
Commodities’ performance in 2019 has been affected by distortions created by protectionist tariffs, moderation in the pace of global gross-domestic-product growth, higher geopolitical risk, and strong growth in some metal-consuming sectors, says Cailin Birch, global economist at The Economist Intelligence Unit.
The S&P GSCI Total Return Index, which tracks 24 commodities and is heavily weighted in energy, was up about 17 percent so far this year to December, 18, while the Bloomberg Commodity Total Return Index, which tracks 22 commodity futures contracts, added 6,6 percent as of December 18.
“Global growth expectations were very low coming into 2019,” with commodities, as measured by the Bloomberg Commodity Index, having been the “worst performing asset class over the past seven years,” says Chris Gaffney, president of World Markets at TIAA Bank. However, an overall improvement in global growth prospects helped the commodities rally this year, he says, pegging the sector’s performance as “good, but not great.” — Reuters.