The Bloomberg Commodity index has had a strong week, trading up 1.6% and boasting a 6.8% increase year-to-date. Precious metals, in particular, saw a significant surge with silver climbing back above USD 30 and industrial metals also performed well, with copper jumping 6.2%. This positive trend was partly fueled by optimism over additional stimulus measures in China following the Third Plenum meeting in mid-July.
However, concerns linger regarding copper’s potential to continue moving higher as supply remains abundant and exchange-monitored stocks have reached a four-year high. Despite this, the overall outlook for commodities remains positive.
In the world of precious metals, gold and silver are looking to an early rate cut for support. The recent US job report, which showed downward revisions in prior payrolls and an increase in the unemployment rate to 4.1%, has led to a fall in bond yields and kept the possibility of a September rate cut alive.
Meanwhile, the container freight industry is experiencing a surge in rates once again. The ongoing congestion at ports, exacerbated by longer ship routes and increased demand for consumer goods, has led to a logistical nightmare. Empty containers are piling up in harbors around the world, creating a shortfall in China where they are urgently needed.
The Drewry Global Composite index has risen for the tenth consecutive week, with last week’s 10% increase driving rates to USD 5868 per 40-foot container. This represents a staggering 300% year-over-year increase, putting upward pressure on goods worldwide. The surge in prices on major routes from China to key destinations like Rotterdam, New York, and Los Angeles is further driving this trend.
