St. Patrick’s Day didn’t just have a pot of gold at the end of the rainbow, but had basically the whole commodity basket. The S&P GSCI that represents the world’s most significant commodities, ended Mar. 17 with a positive total return year-to-date for the first time in 2016, up 1.9%.
The index reached its highest level since Dec. 10, 2015, and gained 18.8% since its bottom on Jan. 20, 2016. This is the most the index has ever increased in just 40 days after bottoms.
Further, now in March, 23 of 24 commodities are positive. This is the most ever in a month with one exception when all 24 commodities were positive in Dec 2010. It is also the fastest so many monthly returns of commodities changed from negative to positive, making a comeback from Nov. 2015 when just two commodities were positive.
Now, only aluminum is negative in Mar., down 3.1%. However, its roll yield recently turned positive that shows more scarcity (that is very rare for aluminum,) indicating it may turn with the rest of the metals. Especially if the U.S. dollar weakens, the industrial metals tend to benefit most of all commodities. That says a lot about their economic sensitivity given all commodities rise with a weak dollar.
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