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LONDON/SINGAPORE.— Commodity prices went on the rampage on Monday as industrial buyers and traders scrambled to source raw materials hit by supply disruptions caused by Russia’s invasion of Ukraine.
Nickel rocketed 76 percent, palladium reached a record level and gold broke through $2,000 an ounce on safe-haven appeal, while oil and wheat jumped to 14-year highs.
“Nerves of steel will be needed amid the extreme volatility,” analyst Daniel Briesemann at Commerzbank in Frankfurt said in a note. Many markets saw rollercoaster swings, with oil and metals reversing direction as headlines flashed across traders’ screens.
The ferocity of some gains was fuelled by speculators cancelling out bearish positions, but once that buying ran its course, prices slid, traders said.
Russia’s invasion has been condemned around the world, sent more than 1.5 million Ukrainians fleeing abroad, and triggered sweeping sanctions that have isolated Russia to a degree never before experienced by such a large economy.
Commodity markets have been shaken not only by tough Western sanctions on Russia that might be widened to include oil, but by logistics turmoil that has blocked the flow of grains and metals from the region.
The searing rally in raw material prices has sparked concerns over economic growth in countries still recovering from the Covid-19 pandemic. — Reuters.
Online Reporter