China is slowing, Europe is slowing, and the US economy is also in the process of slowing down over the coming quarters.
As a result, commodity prices are falling.
Prices for energy, which make up almost 60% of the S&P GSCI, are declining because of weaker demand from China and more energy supply in the US.
Agriculture prices are falling, in particular soybean, driven lower by weaker global growth. But there are exceptions such as coffee, cocoa, livestock, and orange juice, where low supply is important.
Industrial metals prices are falling because of weaker global growth. For precious metals, gold prices are rising as households in China diversify away from falling Chinese property prices and falling Chinese stock prices. Central banks are also buying gold.
Our latest commodity outlook chart book is available here.
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