You don’t want to lose money due to inflation ? Consider adding these commodities to your portfolio

In the current situation, commodities are being intensively discussed as the top investment asset of today. However, will commodities continue to experience across-the-board growth in the coming months and thus still be an option for investors despite (already in the meantime) high prices?

“Green metals” are trending

It is likely that for some commodities, the expectation of further growth is pronounced realistic. However, this is far from universally true. That said, there is a distinction to be made when investing. For commodities, it is essential to look first and foremost at the factors, the extent to which particular sectors are dependent on the commodity in question and whether there is a prospect of growing demand for them.

Opportunities could include so-called ‘green metals’. These are primarily copper, nickel, silver, aluminium and platinum, which are needed in the production of electric vehicles. Their price increases are driven by many countries’ intention to improve the environment through the introduction of emission allowances and investment in zero-emission electric vehicles. The focus on electromobility could in particular stifle the growth of copper, which is needed by many innovations (including 5G technology) and which EV production cannot do without.

Gold is currently trending

The traditional safe haven is gold. As market uncertainty grows, so does the likelihood that a greater proportion of investors will gravitate towards this relatively safe investment. The recent period (the pandemic and disruption in global trade and, more recently, the war in Ukraine) has provided a number of impulses that have supported gold’s rise. For example, risk appetite has weakened just ahead of the release of US inflation data, which could “kick-start” more aggressive monetary policy by the Fed. Today, we see tensions in the market over the war and economic sanctions against Russia, and the threat of a Russian energy boycott in the form of a reduction or halt in oil or gas purchases still looms on the horizon. What will be important for the gold price in the coming weeks is how Russia behaves and the extent to which events move towards a dampening or even an end to the military conflict.

Critical agricultural commodities in the aftermath of the war

In agricultural commodities, wheat and corn (due to limited exports as a result of the war), as well as coffee, are closely watched items. However, in addition to the war, there is also the factor of high fuel and fertiliser prices, which further increase commodity prices. It is highly unlikely that the situation will turn around any time soon as the conflict in Ukraine is unlikely to end quickly. Not to mention even bigger problems for commodity markets next year, when significantly smaller areas of wheat and maize will be sown than in the past.

COVID-19 can still shuffle the cards

It is interesting to see how the COVID-19 pandemic in China is currently affecting oil prices following the onset of war and the “shooting up” of oil prices. China is the largest global importer of oil and the huge conurbation of Shanghai alone consumes about 4% of imported oil. The city’s COVID lockdown recently drove the price of international benchmark Brent crude below USD 100, the lowest level since February. However, after the impact of this news, oil went up again.

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