As global economies gain momentum, industrial metals and commodity-related exchange traded funds are beginning to turn around.
Industrial metals like copper, nickel, iron and steel have all rebounded in recent months as traders bet on improving global economic conditions would bolster demand for the base metals after prices hit multi-year lows.
Related: Miner ETFs Surge on Improving Metals Prices, Economic Outlook
Supporting the recent gains in base metal prices, markets saw improving data from China, the world’s largest consumer of industrial metals. However, some are beginning to doubt the sustainability of the metal market, pointing to signs of potential weakness in Chinese growth ahead.
Moreover, a strengthening U.S. dollar could weigh on commodities – the USD and commodities typically exhibit an inverse correlation as a stronger dollar makes USD-denominated assets like commodities more expensive.