Commodities are extending their generally poor performance into a third successive year. Concerns about the early withdrawal of monetary stimulus at least are overdone, even though there may still be another bout of nerves when the Fed does start to taper its asset purchases. But other headwinds will persist, or strengthen. The recovery in global economic activity is likely to remain subdued, with China in particular facing a prolonged slowdown. At the same time, the supply of many commodities should rise sufficiently strongly to meet higher demand even at (much) lower prices. Rounding off the negative picture, investor enthusiasm for commodities as an asset class is at a low ebb.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services