Commodity Market
Table 2: Selected Commodities Performance
Commodity
3-Jun-13
S&P GSCI Index
31-Oct-13
% Return
0.0%
622.56
622.52
Oil
93.45
96.38
3.1%
Natural Gas
3.991
3.581
-10.3%
S&P GSCI Copper Index
519.42
513.96
-1.1%
S&P GSCI Silver Index
1109.42
1067.73
-3.8%
S&P GSCI Gold Index
822.02
770.67
-6.2%
S&P GSCI Agriculture Index
709.6
634.11
-10.6%
S&P GSCI Aluminum Index
121.03
116.85
-3.5%
Source: Bloomberg
Commodities have performed poorly in 2013, and despite
some signs of a recovery, there is not much evidence that the
asset class will have a sustained recovery in the near future.
The Chinese economy did not experience a hard landing,
which should support industrial metal prices. The Federal
Reserve (Fed) decision to delay tapering in September and
October was supportive of precious metal prices. Energy
prices were boosted by the threat of a strike on Syria, and have
remained higher even though the threat never materialized.
Commodity returns have decoupled from equity returns in
2013, which should attract investors back into the asset class.
The S&P GSCI Index, which gives an indication of
commodity market performance, has fluctuated greatly for
the period under review but has ended basically flat at 31
October, 2013. The outlook for the commodity market will
depend on the following three factors:
• The continued de-linkage of commodity prices from
wider macroeconomic trends, which will allow the
fundamentals of individual commodities to influence the
prices.
• The economic performance of emerging market, and in
particular China, Brazil, India and Indonesia.
• The Fed tapering timetable, which will affect base and
precious metals.
22
Caribbean Investment iQ December 2013
Energy
Crude oil prices have been d