Will Commodities Outperform Equities This Year?

Guangdong Sheng, China – July 30, 2018 – The world of commodities is attracting attention of investors and analysts in the current market situation. This year, the top ranking commodities so far have been oil, nickel and wheat. The larger scenario is considered by some analysts to favor commodities this year, including rising inflation.

Rise in inflation and high borrowings by countries have made investors consider commodities such as energy and metals seriously. Early June saw copper appreciating fast to almost a year high, before declining by 15 percent. Oil was expectedly the top performer among 14 commodities of the US Global Investors, with a gain of 23 percent. Nickel and wheat came next with around 16 percent upswing.

Some analysts project commodities to outperform stocks in 2018, though they have had a below par performance last year. For almost the entire first half of 2018, commodities have appreciated nearly 3% on the back of crude oil, better than the S&P 500. The oil rally is also not going to diminish, given the squeeze on supply. Some projections peg the return from commodities in the coming 12 months at 10 percent, assuming correction in dollar and easing of trade issues.

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