Investing.com | Mar 21, 2024 10:54
Seasonal factors play a significant role in driving commodity prices. Understanding these seasonal patterns is crucial for investors looking to navigate this asset class effectively.
Here are some key factors influencing the prices of various commodities:
While these funds can make a great addition to a diversified portfolio, the following are the four selected commodities that you can consider including in your portfolio for growth.
It is always good to have some gold in our investment portfolio. Apart from its performance (over the last 20 years it has achieved an average return of more than +8% per year), it is very interesting for diversification and to protect us from adversities. A combination of stocks and gold makes a portfolio much more solid and balanced.
Its current bullish strength is due to:
If we take the last 10 years, the price at the end of August was +3.25% higher on average than at the beginning of the year. At the end of September, it was +8.22% higher on average. From September to the end of December, it was +13.29% higher.
If we take the last 50 years, the gold price is best between November and the end of February, when 3 of the 4 best monthly results of the year are usually produced. March is usually the worst month.
The best ETF is the SPDR Gold Shares (NYSE:GLD).
Arabica coffee futures hit new two-month lows. Brazil's coffee exports were up nearly 48% in February compared to a year earlier. Production is expected to be up 5.8% from the previous year, which will generate a surplus of 1 million bags.
It is interesting because as you can see in the chart, it is in a sideways range and once it touches one of the extremes it bounces very well.
It is possible to trade with both Robusta and Arabica coffee, but if you are looking for something calmer, it is better to trade with Arabica coffee, and if you are looking for more movement and volatility, Robusta coffee is better.
The trading hours for robusta and arabica coffees, whether they are traded in the United States (New York) or in the United Kingdom (London).
What drives the price of coffee is:
A good ETF is WisdomTree Coffee (LON:COFF).
Cocoa futures remain strongly bullish and reached record highs due to lingering concerns about shortages in West African cocoa supplies.
Certain cocoa plants in Côte d'Ivoire and Ghana have halted or reduced processing activities because they could not afford to buy beans.
At the same time, the International Cocoa Organization (ICCO) warned of unfavorable growing conditions and crop diseases.
What moves its price:
Cocoa has two futures markets:
CME cocoa futures trade in 10 tons and ICE futures are open Monday to Friday from 9:00 a.m. to 4:50 p.m. (London time). It is normally measured in tons, but can also be measured in kilograms. The price moves in ticks of $1/tonne and is equivalent to $10 a contract.
It is interesting because the shortage of supply is still in force and this favors the rise in its price.
A good ETF is WisdomTree Cocoa.
Silver rises to its highest levels in more than three months supported by rising geopolitical tensions and an improving industrial outlook in China, the top metal consumer.
The country's industrial production, fixed asset investment and retail sales grew more than expected.
There is a seasonal pause in silver which is based on the fact that from the home stretch of one year and the first month and a half of the following year silver generally tends to rise and this has been detected for example for just over half a century ago, specifically during The last 52-53 years.
Concretely it is from the middle of the month of December (to be more exact the 16th) to the middle of the month of February (exactly the 20th-21st).
If we take this period, since 1968 silver has obtained with this seasonal pause an average increase of +7.20%.
The reason, according to Seasonax, is that in the industrial sector silver orders are placed on that date, so the demand increases substantially and with it the price of quotation.
It is possible to invest with futures, the most used contract has the symbol SI and each one of these contracts is equivalent to 5,000 ounces. There are also 1,000 ounce micro contracts on the COMEX futures exchange in Chicago.
You can also buy shares of companies that are involved in silver mining. Some of the big ones would be:
And concerning funds and ETFs, we would have:
***
Do you invest in the stock market? When and how to enter or exit? Try InvestingPro!
Take advantage of it HERE AND NOW! Click HERE , choose the plan you want for 1 or 2 years, and take advantage of your DISCOUNTS. Get from 10% to 50% by applying the code INVESTINGPRO1. Don't wait any longer!
With it, you will get:
Act fast and join the investment revolution - get your
Disclaimer: The author does not own any of these shares. This content, which is prepared for purely educational purposes, cannot be considered as investment advice.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.