Commodities prices reach all-time highs

Commodities markets continued to rise on Monday morning in London as news of shortages propelled key metals to all-time highs.

Copper futures contracts increased by 2.4% in London to reach new highs of $4.86. Iron ore was also on a tear in China, climbing 10% to a record high. Meanwhile, steel gained 6%. Last week, palladium also broke above $3,000 to hit a new record high.

Gold also posted its best week since November 2020, while Silver prices increased 6% to record their biggest weekly rise in 3-months.

There are various fundamental factors why commodities are on the move. However, the key driver is a vaccine-led recovery fed by massive amounts of global stimulus into Green Energy and Infrastructure projects.

According to Neil Wilson, chief markets analyst at Markets.com, there could be a lot of speculative buying and trading pushing commodities higher. However, there still seems to be a lot of momentum behind the trade and reasons to think fundamentals will resume to support.

the commodities market resumes to be on fire

Six of the 10 top FTSE 100 stocks on Monday morning were miners or commodity traders. Rio Tinto gained 3.5% by 9.30 am in London. BHP Group also surged 3.4%. Fresnillo boosted 2.2%, while Antofagasta advanced 2.5%.

Evraz and Glencore also clocked strong gains of 1.7% and 2.1%.

The moves upward follow substantial gains on Friday when spot iron ore broke $200 a tonne for the first time and copper reach more than $10,200 per tonne.

Mining stocks appeared to offset the weakness in the FTSE, which increased 0.2% in comparison. Consumer goods and tobacco firms are dragging it down.

AJ Bell investment director Russ Mould reported that the commodities market continues to be on fire with a near-8% rally in iron ore and a 2.6% rise in the price of copper, setting the tone for what could be an exciting week on the markets..