Commodities market and related exchange traded funds may not have started off the year on a stable footing, but the asset category is ending 2017 on a high note with one of its longest back-to-back gains on record.
The Bloomberg Commodity Index, a measure of 22 raw materials, closed up 11 days in a row, and if it remains positive on Friday’s close, it would be the longest run in records dating back to 1991, Bloomberg reports.
The actively managed ETFS Bloomberg All Commodity Strategy K-1 Free ETF (NYSEArca: BCI), which follows the Bloomberg Commodities Index and tracks the price of rolling positions in a basket of commodity futures with a maturity between 1 and 3 months, and the actively managed GraniteShares Bloomberg Commodity Broad Strategy No K-1 ETF (COMB), which is benchmarked to the Bloomberg Commodity Index and structured as 1940 Act fund, are both up about 3.0% over the past week.
Meanwhile, the PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC), the largest broad commodity-related ETF, added 2.7% over the past week.
While the Bloomberg Commodity Index and the broader commodities market have strengthened in recent weeks on improving crude oil, copper and gold prices, the commodities space remains well below 2008 highs.
Crude oil prices are back above $60 per barrel, with West Texas Intermediate near its highest level in over two years, as falling U.S. inventories and a pipeline explosion in Libya bolstered the energy markets. Meanwhile, rising global demand and diminished output from the Organization of Petroleum Exporting Countries and allies also helped support higher pricing.
“The key driver for the oil market this year has been that the OPEC and Russian production cuts were introduced, complied with and extended,” Ric Spooner, a Sydney-based analyst at CMC Markets, told Bloomberg.
In the metals space, copper is enjoying its best run in almost three decades on supply concerns out of China, stronger demand from a growing global economy and a weaker U.S. dollar.
Gold is also set for a second year of gains and could see prices rise even further as Chinese buyers typically fueled increased demand in the January month. Furthermore, Indian demand could also rise in 2018 after falling to a seven year low in 2016 and continued weak demand this year.
For more information on the commodities market, visit our commodity ETFs category.