Both oil benchmarks along with most metals have been posting positive returns for at least the third consecutive week, the company noted.
Brent and WTI rose 5% and 4.5% respectively, with both benchmarks trading around their two-month highs for most of the week. According to ETF securities this seems to indicate that the reduction of oil production in the US combined with key OPEC members’ decision to freeze production at January levels could be sufficient to reduce the global oversupply.
A similar picture is emerging in precious metals, with all of them including gold have reached multi-year lows at times within the past six months and recovering since, posting an average return of 17% from their lows.
“Despite larger-than-expected stockpile, US oil production declined for the sixth consecutive week the level last seen in November 2014, lending support to oil prices,” said Edith Southammakosane, multi-asset strategist at ETF Securities. “While expectations of rate hikes usually weigh on gold price, heightened uncertainty in cyclical markets has seen demand for gold and its price rise as investors look for safety in a haven asset,” she added. “While silver has failed to follow gold prices higher, inflows last week were more comparable, with US$72.8mn of inflows into silver.”
Jon Jonsson, an absolute return bond fund manager at Neuberger Berman, is one investor who is starting to see some opportunities amid the commodities-driven emerging markets gloom.
He said that having had little emerging market debt exposure in his fund for some time he has begun to find select attractively valued assets. Jonsson added that oil could recover later this year to as much as $50 per barrel.
