Top Commodities To Watch In 2024: Gold, Oil And Exotics

Commodities, ranging from precious metals to energy resources and agricultural products, are essential components of the global economy. Unlike financial assets, their value is largely determined by supply-and-demand dynamics, making them crucial tools for diversification. As highlighted by Octa financial market analyst Kar Yong Ang, commodities are playing an increasingly vital role in portfolios in 2024, serving as a hedge against inflation and currency devaluation. For Singaporean investors, keeping an eye on these top commodities can help minimize financial risks and capitalize on emerging market opportunities.

Gold

Gold remains a top commodity to watch in 2024 due to its role as a safe-haven asset and currency debasement hedge. Ongoing geopolitical tensions and financial volatility have significantly boosted demand for gold, while central banks continue to be major buyers, purchasing 228 tons in Q1 2024, a 34% increase from the previous year. 

Moreover, reductions in import duties by key markets like India have strengthened retail demand, driving gold prices to new highs. Singaporean traders should closely monitor inflation rates, interest rates and the strength of the American dollar, as gold’s price often inversely correlates with the USD exchange rate. Given the Federal Reserve is expected to cut interest rates, gold’s attractiveness as an alternative investment is likely to increase.

Oil

Oil continues to be a critical commodity in 2024, despite recent price declines, due to its fundamental role in powering the global economy. As noted by market experts, geopolitical tensions and OPEC+ production decisions heavily influence oil prices, making the market particularly sensitive to shifts in supply and demand dynamics. The economic slowdown in major economies like China and the U.S. has tempered global oil demand, with expected growth reduced to 1.2 million barrels per day (mb/d) in 2024, down from an earlier forecast of 2.4 mb/d.

However, oil remains indispensable as a primary energy source and its market is prone to significant price fluctuations, especially in the face of geopolitical uncertainties or potential supply disruptions. Traders should closely monitor crude oil and petroleum inventory levels in key consuming nations, as well as production activities in major oil-producing countries, to stay ahead of potential market shifts. As the world navigates through these uncertain economic and geopolitical landscapes, oil remains a strategic asset for investors looking to manage energy risks and capitalize on potential price movements.

Lithium

Lithium is quickly becoming a key player in the global shift toward green energy, primarily due to its essential role in electric vehicle (EV) battery production. As the EV market is set to expand significantly, with a projected 35% increase in sales in 2024, demand for lithium is expected to surge. This positions lithium as a compelling option for traders, especially as countries worldwide invest heavily in renewable energy infrastructure and scale up EV production. 

Moreover, advancements in battery technology, such as improving energy density and extending battery life, are further driving the importance of lithium. However, direct exposure to lithium is challenging due to the lack of liquidity in its futures market. Investors often gain exposure through stocks of lithium producers or exchange-traded funds (ETFs) that focus on this sector.

Nickel

Though less talked about than other commodities, nickel remains a vital resource, particularly in the development of high-energy-density batteries. The demand for nickel is closely tied to the growth of the battery industry, especially as it is a crucial component in the production of EV batteries. However, recent volatility in the nickel market, including a nearly 15% price drop due to increased supply from major producers, highlights the commodity’s sensitivity to market dynamics. 

Traders should be mindful of supply constraints and geopolitical risks that could impact prices further. Keeping an eye on technological advancements in battery production and shifts in global supply chains will also be key, as these factors will certainly shape the future demand for nickel. Given the limited liquidity in nickel futures, most investors seek exposure indirectly through investments in stocks of nickel-producing companies or sector-specific ETFs.

Hydrogen

Hydrogen is likewise gaining recognition as a key player in the clean energy transition, with governments worldwide investing heavily in hydrogen infrastructure. In 2023, direct investments in hydrogen-related projects reached nearly $16 billion, indicating a strong commitment to developing this sector. The International Renewable Energy Agency (IRENA) also estimates that hydrogen could meet up to 12% of global energy demand by 2050, highlighting its transformative potential in the energy market. 

However, hydrogen is not traded like traditional commodities, and there are currently no active market or futures contracts. As a result, traders looking to capitalize on hydrogen’s growth will need to consider alternative strategies, such as investing in companies involved in hydrogen production and infrastructure development.

Diversify With Confidence

For Singaporean investors, 2024 presents a unique opportunity to diversify portfolios by focusing on commodities poised for growth in the coming months and years. Because these assets provide a hedge against inflation, currency devaluation and energy security risks, they are valuable tools for managing volatility and enhancing long-term returns.

To effectively capitalize on these opportunities, partnering with a globally recognized broker like Octa can provide access to a wide range of commodity markets. Octa's innovative trading platform and comprehensive market insights offer Singaporean traders the advantage they need to navigate these markets with confidence. By staying informed and strategically diversifying, investors can maximize their potential for growth while minimizing risk in the year ahead.

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