Saxo Bank: Commodity prices continue to rise as the global energy...

A recent report issued by Saxo Bank indicated that commodity prices have been rising continuously for a month without showing any signs of retreat, with the continuing global energy crisis and its direct effects on other sectors, especially the energy-intensive industrial metals sector.

The report, which was reviewed by the “Vision”, clarified that the trend of China and Europe to reduce mineral production contributed to an increase in the price gains of a group of major minerals, many of which play an important role in pushing the world towards adopting carbon-neutral economies.

The report pointed out that the continuous rise in commodity prices began to raise concerns related to its impact on consumers and lower demand, which will eventually lead to support more balanced markets.

The report indicated that global growth recorded regular declines with high energy prices that act as a direct tax on consumers, high inflation rates, slowing solutions to address shortages around the world, and the need for greater medical efforts to limit the spread of the virus, which has not yet been contained.

The report pointed out that the slowdown in the Chinese real estate market and reductions in Chinese industrial production may lead to limit the gains in commodities achieved in the coming months.

The report emphasized that inflation is still an important issue that occupies the world, and after months of limited trading, the difference between inflation-protected bonds and ordinary bonds has begun to widen.

The break-even yield, which reflects market expectations of inflation rates in the United States of America over the next five years, reached 3%, exceeding the highest rate recorded since 2005, according to the report.

The report indicated that the rise in the 10-year break-even yield to 2.70% contributed to curbing the real returns by about 1%, which supported the gold markets, which are witnessing increased competition with cryptocurrencies, especially after the opening of exchange-traded funds linked to Bitcoin futures contracts this week.

Industrial metals saw the biggest gains so far this month, as the global energy crisis and China’s efforts to combat pollution helped reduce production at a time when demand levels did not record any significant decline.

The copper market took center stage last week, as the rapid decline in available warehouse stocks tracked by the LME Index helped an unprecedented rise in the cost of metals ready for immediate delivery.

In recent weeks, large orders for warehouse stock withdrawals have seen copper availability fall to just 14,150 tons, the lowest level since 1974.

Concerns about the pace of Chinese growth in general, and in particular the boom in the Chinese real estate market, kept copper in a relatively narrow range for several months.