International oil prices jumped more than 4 percent on Monday.
International commodity prices have risen to nearly eight-year highs at a Time when investor interest in a variety of commodities, from Crude Oil to agricultural commodities such as corn, is soaring. International oil prices jumped more than 4 percent on Monday (22) as markets anticipated that U.S. crude oil production was slow to pick up.
Market bullish bets on commodities have climbed to the largest in at least a decade, while safe-haven funds have also poured into the asset class, collectively betting that the economy will rebound after the Epidemic, the government’s stimulus measures coupled with near-zero interest rates will push up demand and Inflation, and make the dollar weaken further.
The Bloomberg Commodity Spot Index, which tracks the price movements of 23 raw materials, rose 1.6% on the 22nd to its highest since March 2013. The index has risen 67% so far after hitting a four-year low in March last year.
New York crude oil futures for April 22 closed up $2.44, or 4.12%, at $61.70 per barrel; Brent crude oil futures jumped $2.82, or 4.48%, at $65.73 per barrel.
Raw materials Monday’s rally was mainly driven by copper, copper prices rose above $9,000 per metric ton for the first time in nine years, coffee and sugar prices also rose strongly. The main reason for the surge in crude oil is market speculation that global supply will be sharply tightened, the United States Texas and other oil production areas suffered severe cold, oil companies closed 2 million to 4 million barrels per day production capacity, despite the gradual resumption of production, but oil production facilities may be damaged by the cold, the resumption of production time may be more often than expected.
TD Securities commodity strategist head Bart Melek said, “People who had ignored commodities for a long time are now starting to lay out, which means the trend will continue for a while, mainly because of the expected shortage.”
JPMorgan Chase said earlier this month that commodities are clearly unfolding a new super cycle. Other brokerages, including Goldman Sachs Group, have a similar view. Commodities have seen four super cycles in the past 100 years.
Commodities as an asset class is often seen as a good hedge against inflation, and investors have recently become increasingly concerned about rising inflation. J.P. Morgan analysts said on Feb. 10 that the commodity rally would be “driven by the ‘Roaring 20s’ glory of a post-epidemic economic recovery with ultra-loose monetary and fiscal policy themes.
International Gold prices also rose nearly 1.5% on Monday, hitting a near-week high, reflecting expectations of rising inflation sparked market concerns about stock market valuations and prompted investors to turn to gold as a safe-haven, with further support from a weaker dollar.
Gold spot 22 closed up 1.42% at $1,809.67 per tael, standing back at the $1,800 mark. U.S. gold futures settled up 1.7% at $1,808.40 per tael.
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