Demand for precious metals continued to rise in September.

Swedbank’s Total Commodity Price Index rose by 1.2% in US dollars in September compared with the previous month. The increase was mainly driven by higher metal and food prices. At the same time supply conditions have tightened, especially for copper and nickel, which is also an indication of how little capacity is being added.

The weakening of the dollar during the summer and fall is another factor driving commodity prices higher on a broad front. Measured in Swedish kronor and euro, prices have trended lower in the last 3-4 months, which is easing inflation impulses from commodity markets.

Demand for precious metals continued to rise in September, not least due to expectations that the US Federal Reserve will resort to additional monetary stimulus measures to strengthen the economy. A further decline in the dollar and uncertainty about the strength of the global economy would indicate that the price of gold could increase further in the short term, which is also expected to push the price of silver higher.

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