Commodities As An Inflation Hedge

(Benzinga) - Commodities have rallied this year, outperforming equities and underscoring their credentials as a hedge against rising inflation and as a portfolio diversifier at a time when investors are debating if the world’s largest economy can avoid tripping into a recession as the Federal Reserve (Fed) raises interest rates.

  • Commodities have outperformed equities as inflation rises
  • Crude oil leads the price rally in commodities, rising 48% so far this year
  • Commodities are rallying despite a strengthening dollar
  • Expected slowdown in global growth clouds demand scenario for 2023

The S&P GSCI, a composite of 24 commodities representing sectors from energy to agriculture and livestock to metals, has surged 34 since the start of 2022, and is up 213% from its 2020 low during the pandemic, while the CRB Index, which consists of 19 commodities including crude oil, gold and corn, is up about 37% this year, and is up nearly 200% from its 2020 low.


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