- Energy prices were all lower last week with natural gas prices decreasing the most. WTI and Brent crude oil prices decreased approximately 2.4% and gasoline and heating oil prices decreased 3.0% and 2.1%, respectively. Natural gas prices fell 13.2%.
- Base metal prices were mixed last week. Aluminum and zinc prices fell 1.7% and 1.6%, respectively, while copper and nickel prices increased 0.1% and 1.5%, respectively.
- Grain prices all finished lower last week except for Kansas wheat. Chicago wheat and corn prices decreased 0.2% and soybean prices fell 1.6%. Kansas wheat prices increased 1.2%.
- Gold, silver and platinum prices all finished the week lower. Gold and platinum prices were down 0.6% and silver prices declined 0.4%.
- The S&P GSCI outperformed the Bloomberg Commodity Index last week. The S&P GSCI fell 2.41% while the Bloomberg Commodity Index decreased 2.62%. The Bloomberg Commodity Index’s larger natural gas, precious and base metal and grain exposure was responsible for the underperformance.
- Total assets in commodity ETPs increased $132.4m. Gold ($261.0m) ETP inflows were primarily offset by crude oil (-$82.5m), energy (ex-crude oil) (-$28.2m) and broad commodity (-$16.6m) ETP outflows.
Despite Chinese trade concessions (ie, reduction of automobile tariffs and the resumption of U.S. soybean purchases), fears of weaker global growth in general and of weaker Chinese growth in particular spurred increased concerns of slower U.S. growth. Friday’s weaker-than expected Chinese industrial production number and Europe’s weaker-than-expected composite purchasing managers index helped move commodity prices and U.S. stock markets lower while strengthening the U.S dollar. The S&P 500 finished the week 1.3% lower while the U.S dollar increased 1.0% (as measured using the DXY index). 10-year U.S Treasury rates increased just under 5bps.
Another volatile week for crude oil prices. Concerns that OPEC’s (and Russia’s) announced cutbacks would be difficult to implement drove prices lower through Wednesday only to lessen on Thursday lifting oil prices to unchanged on the week. On Friday crude oil prices dropped between 2% – 2.5%, on concerns weak global growth would decrease crude oil demand. Natural gas prices, down 7% through Thursday, dropped another 6% on Friday after longer-range weather models forecasted warmer-than-expected temperatures for the rest of December, reducing supply concerns.
Base metal prices moved lower pressured by both a stronger U.S. dollar and increased concerns of slower Chinese economic growth. Nickel prices down 0.6% through Thursday, rallied 2% on Friday on the back of lower inventories and from continued expectations of demand from EV batteries.
Gold and silver prices moved lower mainly due to the stronger U.S. dollar. Platinum prices moved with base metal prices.
Wheat prices were supported by reports of lower global inventories (and exports) especially from Russia. Corn prices were supported by greater-than-expected export demand while soybean prices, initially benefiting from the resumption of Chinese purchases, suffered from growing concerns about global and U.S. over supply.
Coming up this week
- Full data week, highlighted by 2-day FOMC meeting beginning Tuesday.
- Housing starts on Tuesday followed by existing home sales on Wednesday.
- FOMC meeting announcement and forecast Tuesday afternoon followed by Jerome Powell press conference a half hour later
- Jobless claims and Philadelphia Fed business outlook survey on Thursday.
- Durable goods, personal income and outlays and 3rd estimate of Q3 GDP on Friday.
- EIA Petroleum Report on Wednesday and Baker-Hughes Rig Count on Friday.
Past performance is no guarantee of future results.
Investing in physical commodities, including through commodity-linked derivative instruments such as Commodity Futures, Commodity Swaps, as well as other commodity-linked instruments, is speculative and can be extremely volatile, and may not be suitable for all investors. Market prices of commodities may fluctuate rapidly based on numerous factors, including: changes in supply and demand relationships (whether actual, perceived, anticipated, unanticipated or unrealized); weather; agriculture; trade; domestic and foreign political and economic events and policies; diseases; pestilence; technological developments; currency exchange rate fluctuations; and monetary and other governmental policies, action and inaction.
GraniteShares is an independent, fully funded ETF company headquartered in New York City. The firm seeks to launch disruptive ETFs. GraniteShares’ focus is on products that bring the excitement back to investing, using new ideas, innovative structures and low cost. To learn more, please visit us at https://www.graniteshares.com.
All investing involves risks, including possible loss of principal. Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about GraniteShares ETFs, please call (844) 476 8747 or visit the website at www.graniteshares.com. Read the prospectus or summary prospectus carefully before investing.