While demand has yet to catch up to elevated supplies, rebounding economies in Europe and steady economic growth in the U.S. could at least keep oil prices steady around current levels in the second half of 2017.
GSG allocates over 57% of its weight to energy commodities with agricultural commodities and industrial metals combining for almost 30% of the fund’s weight. The ETF currently resides about 7% above its 52-week low and 4.8% below its 200-day moving average.
Industrial metals have been solid performers this year as global economies continue rebounding.
“The Journal of Commerce (JOC) Industrial Metals Index is up approximately 6% year-to-date. This is consistent with the global improvement in manufacturing surveys. For example, in the U.S. the Institute for Supply Management (ISM) Manufacturing Index has risen three points since December and is now close to a three-year high. Even more encouraging, the new orders component has been particularly strong,” according to BlackRock.
Although it is faltering in terms of performance, GSG has seen over $206 million in year-to-date inflows, perhaps a sign some investors are comfortable betting on a commodities rally.
For more information on the commodities market, visit our commodity ETFs category.