Saxo Group head of commodity strategy Ole Hansen noted that “strong comebacks” from oil and natural gas helped push a rally in commodities, something further supported by continuing demand for precious metals.
“The strong rally across most commodities attracted renewed demand from hedge funds that more than doubled bullish bets across 20 major commodities to around 1.5 million lots, a two-year high,” he said.
Gold and silver attracted increased interest in particular, and Mr Hansen added that much of this was driven by investors looking for diversification as well as by the recent Brexit vote, which helped drive gold prices up.
“We have maintained a positive view on gold throughout and with the latest developments we have raised our end-of-year forecast to US$1,350 an ounce,” Mr Hansen added.
Mr Hansen pointed out, however, that not all metals followed this trend, noting that “growth-dependent metals such as copper and palladium struggled” as China’s continued growth was met with uncertainty.
All the gains commodities have seen in the past year have been within the second quarter, Mr Hansen added.
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