Commodities made a high record for the second consecutive quarter on the 30th of September. The best-performed commodities futures are the natural gas and lumber.
This made the Bloomberg Commodity Index (BCOM, -0.32%) to post a rise of about 9% in the third quarter of 2020. In the second quarter, the index rose by about 5%. The general rise in commodities will boost the confidence of investors and lends to the fact that COVID-19 xaccine will soon be released for use, particularly in regions with high-risk demographics.
The jump in the commodities prices equally shows anticipations that many more businesses are set to become fully operational and when this happens commodity consumptions will get back to the level before the pandemic struck.
Natural Gas Futures
The Natural-gas futures NGX20, +4.66%, made a jump of more than 44%, whereas lumber futures LB00, +2.55% LBX20, +2.55% rose by about 40% within the same period as the Market Data of Dow Jones revealed.
The rise in the price of the Natural-gas futures was the highest it has ever made since quarter two of 2016.
The demand for the European [liquefied natural gas] rebounded faster than projected even as the U.S. reduced its rate of production which further brightens the support for a tighter market supply outlook for 2021.
On the other hand, Lumber futures have continued to be strong all through the year because of the high demand for lumber despite the lockdown measures put in place. The lumber future prices rose to 928.50 per 1,000 board feet on the first of September before settling down.
There was a high record in the lumber futures when it rose from 430 USD level; at the beginning of the third quarter and when it made roughly 1,000 USD and dropped back to the 550 USD level by the end of September.
The rise and fall in the prices of lumber futures make it a bit difficult for analysts and market participants to accurately gauge the level it would be by the 4th quarter of the year. Thus, projecting the futures prices from the fourth quarter of 2020 to the first quarter of 2021 will be an arduous task that will come with substantially higher risk compared to the market gain in the third quarter.
During the same quarter, silver SIZ20, -1.76% jumped by 26% performing significantly better than gold. Gold GCZ20, -0.39% only made an average 5.3% jump in the last quarter that culminated in September 2020.
Despite that silver performed better than gold in the last quarter, records showed that silver lost roughly 18% in September. This shows the potential for silver to post a volatile move.
Platinum Metal Groups
Other metals equally performed well. For instance, rhodium rose by 73% during the quarter and sold for 13,900 per ounce at the end of September.
Palladium PAZ20, -0.77%, platinum group of metals in addition to rhodium equally recorded a jump of 18.5% in that quarter. The jump in the prices of rhodium and palladium is potentially due to the speedier recovery of the vehicle market in China where the two metals are commonly used in higher quantities for the catalyst.
Meanwhile, there was no production ceased in South Africa because of the lockdown measures imposed as a result of COVID-19. However, the mining companies are about to return to full operational mode.