Investing.com-- For the fourth time in 123 years, this ultrapopular commodity appears to be on the verge of a significant bull market. While past performance is not indicative of future results, it's worth noting that this commodity has shown incredible resilience in the face of economic downturns and geopolitical tensions. As investors look for ways to diversify their portfolios, commodities have become increasingly popular as a way to hedge against inflation and market volatility.
Oil prices moved little in Asian trade on Friday amid caution ahead of key labor data offering more signals on the Federal Reserve's timeline for policy tightening. Brent crude futures were down 4 cents at $73.60 a barrel. U.S. West Texas Intermediate (WTI) crude futures were off 3 cents at $71.89 a barrel, after losing 4 cents on Thursday.
Yogi Berra, the U.S. baseball legend, had it right when he said: “It ain't over till it's over.” And just like that, trepidation over the outlook for the global economy and the potential for a prolonged downturn has given way to a renewed sense of optimism. With the U.S. election in the rearview mirror and the promise of a vaccine on the horizon, investors are turning their attention to the potential for a strong economic recovery in the months ahead.
Mining giant Glencore Plc plans to invest $1.5 billion on an expansion project at its Antapaccay mine in Peru, up from $590 million previously, CEO Ivan Glasenberg said on Thursday. The project, which involves building a concentrator plant to process copper ore, had been shelved last year due to the Covid-19 pandemic. The investment underscores the company's bullish outlook for copper, which is viewed as a key component in the transition to a low-carbon economy.
Gold futures popped above $2,000 an ounce on Thursday, the first time in two weeks, and settled not far from there as the dollar continued to weaken against other major currencies. The precious metal also got a boost from concerns over the potential for inflation as central banks continue to pump stimulative measures into the global economy.
Gold prices crept lower on Wednesday as markets awaited more cues on the raising of the U.S. debt ceiling, while copper prices fell to their lowest levels in over a month. Copper, which is viewed as a bellwether for the global economy due to its widespread use in construction and manufacturing, has been hit hard by concerns over the potential for a slowdown in China, the world's largest consumer of the metal.
One of the words you'll hear most when talking with experts about investing in commodities is 'hedging.' First, commodities, or agricultural, energy, and metal products, are subject to price fluctuations due to supply and demand pressures, changes in global weather patterns, geopolitical tensions, and more. Second, these price fluctuations can have a significant impact on a company's bottom line, especially if they rely heavily on a particular commodity as a key input. Hedging is a way to manage this risk by locking in prices for a set period of time, thereby reducing exposure to market volatility.
Glassnode revealed that Bitcoin has emerged as the strongest performing asset as compared to other major commodities. Over the last 90-days, Bitcoin has outperformed other major assets like gold, oil, and the U.S. dollar. The report stated that Bitcoin's strength is due to a combination of factors, including growing institutional adoption, increased regulatory clarity, and the ongoing mainstreaming of cryptocurrency.
Broad commodity indexes have come under pressure amid disappointing macroeconomic news, with the UBS Constant Maturity Commodity Index falling to its lowest level since September on Tuesday. The index tracks the performance of 27 different commodities, including energy, metals, and agricultural products. The recent decline has been driven by concerns over the potential for a slowdown in China, the ongoing pandemic, and geopolitical tensions.
