A broad-based commodity rally has pushed the Bloomberg Commodity Total Return Index to a 26-month peak, potentially breaking out of a two-year trading range.
The index, which tracks 24 major commodity futures across energy, metals, and agriculture, has gained 5.9% year-to-date and 13.5% annually. Precious metals have led the advance, with gold and silver seeing strong demand due to tight physical markets and increased COMEX vault activity.
Agricultural commodities have shown remarkable strength, particularly Arabica coffee’s 123% annual gain and a revival in grains following a three-year downturn.
The rally’s sustainability is supported by five key long-term drivers: deglobalization, defense spending, decarbonization, de-dollarization, and demographics, suggesting a structural shift in commodity markets despite short-term uncertainties.