leadf
logo-loader

Commodities entering new supercycle, says research

Around 84% of professional investors surveyed by trading platform CloseCross expect the level of trading in commodities to increase in the year ahead, with 32% predicting industrial metals will see the largest price rises

Commodities

Commodities trading is expected to surge in the next 12 months as a new ‘supercycle’ takes effect, according to research from blockchain-based derivatives trading platform CloseCross.

On Monday, the platform said its research among professional investors responsible for around US$380bn in assets under management (AUM) showed that 84% expected the level of trading in commodities to increase in the year ahead, with 29% forecasting a substantial increase.

READ: Best and worst FTSE 100 shares so far in 2021

A key driver of this expectation was the start of a new commodities supercycle, which 81% of investors said was already beginning and could see commodities trade above their long-term price trend for decades-long periods.

The professional investors highlighted that the key reason behind their prediction was a boom in government spending across the world as national economies recovered from the coronavirus pandemic.

Around 80% of investors included in the research highlighted the increase in state spending, while 77% pointed to the “greening” of the global economy as another positive factor.

Meanwhile, 61% believed strong demand from China was fuelling the new supercycle, while 53% cited the weakness of the US dollar and 29% pointed to low interest rates.

In terms of specific commodities, the research showed around 32% of professional investors believe industrial metals will see the biggest price increases in the year ahead, while 27% said precious metals will be the biggest winners.

Oil was among the least popular, with only 22% of investors expecting large price rises, while natural gas and agriculture were even less popular at 13% and 7% respectively.

“Commodities trading is set to surge over the next 12 months and the predictions of a commodity supercycle are driving increasing interest in markets”, CloseCross chief executive Vaibhav Kadikar said in a statement.

“Professional investors are split over which commodities will see the biggest price rises over the year ahead and it could also be difficult for retail investors to forecast the sectors likely to benefit. At CloseCross we will be providing the retail traders contracts on both Gold and Silver, which will undoubtedly see interesting trades”, the CEO added.

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Eqtec continue to deliver on three year strategy, announcing Kibo Energy...

EQTEC PLC (AIM:EQT) David Palumbo, chief executive talks to Proactive London's Katie Pilbeam about their deal for Kibo Energy to become a strategic investor in the proposed Billingham waste gasification and power plant in Teesside, UK. Kibo will acquire a 54.54% equity stake in the Haverton...

1 hour, 13 minutes ago

2 min read