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Commodities climb as Ukraine crisis deepens
Commodities react quickly to a crisis and Ukraine is no exception. Oil and wheat prices are rising amid concerns about supply disruption in Black Sea ports. Gold is offering a safe harbour from the storms while Copper, the global economy weather vane, is pointing at dark clouds on the horizon.
Saxo Bank’s Head of Commodity Strategy says: “Commodities have begun March by rallying to the highest level in almost six months as the intensified crisis in Ukraine has lifted prices from Crude oil and wheat to gold. Copper has gone against this trend by falling to a 3 month low after a gauge for Chinese manufacturing fell to an 8-month low.
For the fourth year in a row oil markets are once again contemplating the risk of supply disruptions and the price has rallied accordingly with Brent Crude, the global benchmark, leading the way.
Wheat prices are being supported as the crisis could threaten shipments from the Black Sea area, an important source of supply into the global market.
Gold jumped to the highest since October with the crisis adding to the current positive momentum. Investors continue to return to gold in response to the rally witnessed so far this year. It was only last week's buying of Exchange Traded Products that finally ensured the first monthly increase in total holdings since December 2012.
Speculators increased their net-long WTI Crude position to a new record during the week of February 25 while the gold net-long jumped to the highest since December 2012.
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