Five Key Charts to Watch in Global Commodity Markets This Week
Sunday, Nov 24, 2024 7:34 pm ET
8min read As investors navigate the dynamic world of commodity markets, keeping an eye on key trends and indicators is crucial for making informed decisions. This week, we're highlighting five crucial charts that offer insights into the global commodity market landscape. From gold's recent slump to Bitcoin's surge, and from the soaring demand for chicken to the record-breaking refinery processing, these charts provide valuable perspectives on the current state and future trajectory of the commodity markets.
**Gold: A Shift in Haven Demand**
Gold prices tumbled following Donald Trump's US election win, with SPDR Gold Shares experiencing its biggest weekly outflow in over two years during election week. This decline can be attributed to reduced political uncertainty and speculation about crypto-friendly policies by the incoming administration. Meanwhile, BlackRock's iShares Bitcoin Trust ETF saw a record daily net inflow on Nov. 7, indicating a rotation from gold to crypto assets. Bloomberg Intelligence expects US spot Bitcoin ETF assets to potentially triple those of gold ETFs in the next three to five years, signaling a long-term shift in investor preferences.
**Poultry: A Global Appetite**
The world's growing appetite for chicken is driving poultry producers' earnings, with profit margins significantly higher than a year ago. Companies like Tyson Foods, BRF, and JBS are capitalizing on this trend, paying down debt and returning capital to shareholders. The global demand for chicken is expected to continue, making poultry producers an attractive investment opportunity.
**Oil: US Gulf Coast Refineries on Fire**
US Gulf Coast refineries are processing at a seasonal record, with nationwide oil processing at the highest level since 2018. This surge comes as profit margins for making fuels are healthy amidst low inventories of both gasoline and diesel. As demand for fuels remains robust, refineries are operating at full capacity to meet consumer needs.
**Renewable Energy: Power Demand Surge**
Power demand is surging, with companies lining up deals to lock in electricity supplies at a record pace. This trend bodes well for renewable energy investments, as the US remains the top market for corporate power-purchase deals, accounting for 116 gigawatts since 2015. The global volume of deals signed in the first 10 months of this year reached 33.9 gigawatts, on track to surpass last year's record high.
**Climate: The Urgent Need for Action**
As the UN's COP29 climate summit enters its second week, data from the European Union shows it's "virtually certain" that 2024 will be the warmest year on record. This highlights the growing urgency for climate action and the potential impact on commodity markets.
These five key charts provide valuable insights into the dynamic nature of global commodity markets, with investor sentiment, consumer preferences, energy demand, and climate-related factors all playing significant roles in shaping market trends. By closely monitoring these developments, investors can better navigate the complexities of the commodity market landscape and make informed decisions.
**Gold: A Shift in Haven Demand**
Gold prices tumbled following Donald Trump's US election win, with SPDR Gold Shares experiencing its biggest weekly outflow in over two years during election week. This decline can be attributed to reduced political uncertainty and speculation about crypto-friendly policies by the incoming administration. Meanwhile, BlackRock's iShares Bitcoin Trust ETF saw a record daily net inflow on Nov. 7, indicating a rotation from gold to crypto assets. Bloomberg Intelligence expects US spot Bitcoin ETF assets to potentially triple those of gold ETFs in the next three to five years, signaling a long-term shift in investor preferences.
**Poultry: A Global Appetite**
The world's growing appetite for chicken is driving poultry producers' earnings, with profit margins significantly higher than a year ago. Companies like Tyson Foods, BRF, and JBS are capitalizing on this trend, paying down debt and returning capital to shareholders. The global demand for chicken is expected to continue, making poultry producers an attractive investment opportunity.
AAOI, ABL, ACHR, ALAR, AMIX...Market Cap
**Oil: US Gulf Coast Refineries on Fire**
US Gulf Coast refineries are processing at a seasonal record, with nationwide oil processing at the highest level since 2018. This surge comes as profit margins for making fuels are healthy amidst low inventories of both gasoline and diesel. As demand for fuels remains robust, refineries are operating at full capacity to meet consumer needs.
AAOI, ABL, ACHR, ALAR, AMIX...Market Cap
**Renewable Energy: Power Demand Surge**
Power demand is surging, with companies lining up deals to lock in electricity supplies at a record pace. This trend bodes well for renewable energy investments, as the US remains the top market for corporate power-purchase deals, accounting for 116 gigawatts since 2015. The global volume of deals signed in the first 10 months of this year reached 33.9 gigawatts, on track to surpass last year's record high.
VSTE Market Cap
**Climate: The Urgent Need for Action**
As the UN's COP29 climate summit enters its second week, data from the European Union shows it's "virtually certain" that 2024 will be the warmest year on record. This highlights the growing urgency for climate action and the potential impact on commodity markets.
These five key charts provide valuable insights into the dynamic nature of global commodity markets, with investor sentiment, consumer preferences, energy demand, and climate-related factors all playing significant roles in shaping market trends. By closely monitoring these developments, investors can better navigate the complexities of the commodity market landscape and make informed decisions.
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