Commodities boom spreads beyond energy and metals

Commodity prices are soaring – oil, gas, copper and a whole host of metals has seen prices take off. But price rises are spreading to soft commodities too.

Cocoa bean drying rack
Coffee stockpiles are shrinking
(Image credit: © Georg Berg / Alamy)

“There has rarely been a better time to add commodities to a portfolio as a hedge against inflation, geopolitical risks and potentially hostile market environments,” says Jeffrey Currie of Goldman Sachs. The S&P GSCI index, which tracks a basket of 24 major commodities, has risen 35% over the past year and analysts see more gains ahead.

Bulls such as Goldman point to “extremely tight inventories, underinvestment across the commodity sector and slow-responding supply”, says Alex Gluyas in the Australian Financial Review. The rise of environmental, social and governance (ESG) investing means that while “capital has never been cheaper due to low interest rates, it has never been more expensive to build infrastructure and equipment such as mines, steel mills”, or drill for an oil and gas well.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.