Commodities: Focus on Metals

With all the recent attention on the Energy sector (THE CURE FOR LOW CRUDE OIL PRICES…IS LOW PRICES), we thought it would be constructive to look at the positive developments in one of the other market sectors. The Metals sector in the Rogers International Commodity Index® is made up of 10 components diversified across both Precious Metals and Industrial Metals (View RICI® Weightings).

  • As we head into the end of June, 2017, the Metals sector is up over 6% YTD
  • While all three sectors were positive in 2016, the RICI® Metals sector was the strongest;
    up approximately 17%
  • The RICI® Metals sector has been the best performing sector in the RICI® since inception
    compounding at 7.6% since 1998
  • However the average price of the component in the RICI® Sector is still down over 46%
    from its highs since 1998

The expected increase in global infrastructure spending (INFRASTRUCTURE! THE LONG-TERM DEMAND FOR COMMODITIES IS GROWING) should be bullish for commodities overall and specifically for Industrial Metals. Importantly, this infrastructure spending is coming after much of the mining industry was forced to close marginal production and contract due to the 2011-2015 decline in prices.

In a recent letter from John Reese, CEO, we examine the Metals sector in further detail:

Read the Full Letter Here.

 

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Alan Konn