MarketWatch recently noted the continued “ugly” performance of the commodity sector in the first half of 2017:
While the commodity sector has stabilized overall since hitting lows in early 2016, BCOM has declined close to 50% since late 2012.
FIGURE 1: BLOOMBERG COMMODITY INDEX (BCOM), PAST FIVE YEARS
While overall performance of the commodities sector was weak in the first half, there were some winners. Precious metals were generally up in the first half of 2017, along with several agricultural products. Palladium, up 28% in the first half, was the biggest winner, while sugar futures were down more than 30%.
FIGURE 2: PERFORMANCE OF MAJOR COMMODITY FRONT-MONTH FUTURES
(FIRST HALF OF 2017)
Gold was up close to 8% in the first half, but it has given back about 2% of the gains in the first trading days of the second half and is well off the highs from early June.
FIGURE 3: GOLD SPOT PRICES (YTD 2017)
Of course, one of the most watched commodities is oil. Analysts expectations are widely divergent for the second half of 2017, after a first half that greatly disappointed commodity bulls. West Texas Intermediate (WTI) crude oil continues to trend lower in price, gaining and losing momentum on the latest news out of OPEC, supply-chain figures, and oil-rig counts.
Some analysts continue to call for a rally for crude into the end of 2017, revisiting prices in the high $50s or even above $60. Well-known investment manager Gary Shilling is not one of those optimistic on oil, according to ThinkAdvisor.