From being in the doldrums in 2015, commodities as an asset class rallied during 2016. Will 2017 Trump last year’s commodities revival? Exactly a year ago, I reflected on what had been a disastrous year for commodities, with all 18 of our most closely tracked assets languishing in the red in terms of price returns for 2015.The performance marked an emphatic end to the supercycle boom.
So what has changed over the last 12 months to enable assets in energy, base metals and precious metals to finish 2016 with handsome gains for the year of 50%, 31% and 11% respectively?
Unsurprisingly, many of the forces behind the contrasting fortunes of commodities during 2015 and 2016 stem from China. However, there were also some tail-winds from Donald Trump’s election victory in November.
As we begin 2017, the performance of the Trump administration will be one of the many political and fiscal uncertainties facing the global economy and commodities sector in particular. Despite this, we remain mildly bullish about both prospects.
It’s important, however, that we first consider the three biggest factors behind commodities’ stellar performance in 2016
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