The commodity sector rose for a second week, with the Bloomberg Spot index heading for a fresh ten-year closing high, according to analysts at Saxo Bank.
Ole Hansen, head of commodity strategy at the firm, believes the renewed strength of the index has been led by the growth and demand-dependent sectors of energy and industrial metals.
He said in a note: “The green transformation push, being one of the key reasons for our bullish outlook for the sector, has only just started.
“Following a very challenging few months in terms of weather developments across the world, the push from governments towards decarbonizing their economies looks set to accelerate.
“A development that is likely to create even tighter markets across several “green” metals from copper and aluminum to zinc and nickel, not to mention several rare earths and even platinum and silver.”
Hansen warned that a prospect for a winter gas crunch remains a real threat, thanks to low stock levels of gas both in Europe and Russia.
“Some companies may even be forced to cut back production in order to curb demand,” said Hansen.
Source: Arab News