Commodity Prices Index Rise as Sharp Rebound in Oil and Base Metal

Commodity price index rose one per cent in Scotiabank as a sharp rebound in oil and firmer base metal prices helped reverse a three-month slide. Other commodities that have done well over the year are premium-grade hard coking coal from Western Canada, potash and hogs and cattle as a result of herd liquidation across North America Heavy and light crude oil — Hardisty, Alta., heavy and Edmonton light par crude — rounded out the Top 10 in 2011 and are among the bank's top picks for investors in 2012. Gold was in seventh place with a 14.6 per cent gain from late 2010 through mid-December 2011.

Scotiabank all items index now is 6.7 per cent above year-earlier levels and will likely end 2011 just above where it was a year ago. Scotiabank says that while most commodity prices remain at profitable levels, there has been a marked loss of momentum after an 18 per cent year-over-year gain in late 2010.

London PM Fix for gold surged by 38.2 per cent from US$1,390.55 per ounce in December 2010 to a record high in intraday trading of US$1,921.18 on September 6. However, the precious metal fell back to US$1,594 on December 16. The star performers of 2011 among the 32 commodities covered by the index were sulphur, a commodity used in DAP fertilizers, which came in No. 1.

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