Energy Shock Drives Record Commodity Gains, But Not All Sectors Benefit
The commodity market has seen another week of record-breaking gains, driven largely by surging energy prices. The Bloomberg Commodity Total Return Index is on track to reach a fifth consecutive weekly gain and a new high, with an 8% rise in the energy sector leading the way. Crude oil has risen close to 8%, while diesel has jumped around 11%. European natural gas was the biggest gainer, rising 13% to a three-year high amid a tight supply outlook ahead of peak winter demand.
However, not all sectors are faring as well. Precious metals are heading for a third consecutive weekly decline of around 2%, while industrial metals have weakened by around 1.5%. The agriculture sector is broadly unchanged despite a recent surge in hedge fund interest.
The energy shock has become a macroeconomic story, with rising fuel prices and inflation concerns lifting bond yields and raising the prospect of further monetary tightening. Saudi Arabia's crude production slumped to 6.23 million barrels per day in August, the lowest level since 1990, adding to pressure on an already tight physical market.
Gold has struggled to maintain its safe-haven status as higher crude and bond yields drive it towards support around $4,300, with silver and platinum suffering even greater losses. Copper's tariff-driven premium has narrowed sharply after a Reuters report stalled a US government decision on tariffs, leading to a sharp setback in the metal's price.