Commodities Trends in Early 2021 Point to Demand Recovery
A finance executive, Julio M. Herrera Velutini founded Britannia Financial Group, a financial services company that provides investment, brokerage, and wealth management solutions. Julio M. Herrera Velutini places clients first as he develops deep-rooted and long-term relationships. Active with established exchanges, including the Dubai Gold and Commodities Exchange (DGCX) and the London Metal Exchange (LME), he tracks trends involving precious, base metals, and other commodities.
Despite this overall dampening of demand in 2020, several key commodities witnessed a sharp rise through the second half of the year, attaining multi-year highs. One factor that increased demand is a relatively weak United States dollar, making commodities less expensive for global buyers after conversion to local currencies. Oil has been a particular beneficiary, with Brent Crude prices surging and Saudi Arabia’s decision to reduce output also increasing scarcity. As regional economies inch toward a post-pandemic recovery, energy usage is expected to rise still further.
With industrial metals, more of a mixed picture is evident. The price gainers include cobalt (40 percent), followed distantly by tin and nickel. In contrast, zinc and iron ore prices have lagged, with question marks about bank lending in China to property sectors one factor. Among precious metals, gold, which enjoyed a “safe haven” bull run in 2020, the trend has been flat in early 2021. With an all-time high price of $2,080 per ounce recorded in 2020, some expect it to test that ceiling again toward the end of the year.