Commodities could strengthen in 2016, says expert

Commodities were down 14.3% by the middle of last month, so were expected to set the worst January since the 1970s, says Jodie Gunzberg, global head of commodities for S&P Dow Jones Indices in a recent research note. But, commodities ended the month with a loss of just 5.2%.

That doesn’t mean prices have hit a bottom, she warns, but she’s optimistic. That’s because “nine of the twenty-four commodities in the S&P GSCI were positive in January. [And], historically, there’s a higher chance the year will end positively than negatively based on the first month’s performance for seven of those commodities.”

Read: $55 oil could happen as early as next year

Overall, Gunzberg says commodity performance for 2016 could be promising, given the the S&P GSCI has a 59% chance of having a positive year. Still, she notes, commodity performance will depend on factors such as oil-supply decisions from Saudi Arabia, Russia and Iran, “in addition to Chinese demand growth, the strength of the [U.S.] dollar and the weather.”

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.