Commodities continue to experience high volatility

With high levels of inflation and ongoing geopolitical conflicts persisting, both commodities and financial markets continue to experience high levels of volatility.

Consumers may be interested to note that General Motors and Snapchat have risen in value while the commodities market is in a state of turbulence.

Kate Leaman, chief market analyst at AvaTrade notes the reason for the continuing volatility in commodities.

Leaman said, “Looking at our most rising table last week, wheat saw its value rise. This comes at a time when Russia, the largest wheat exporter in the world, experienced torrential rain and heavy storms, stopping vessels from transporting the commodity.

Tax deductions: Keep more of your money

“This resulted in a reduced supply of wheat, causing the commodity’s price to increase.

“Elsewhere, the value of General Motors skyrocketed last week. This follows the automotive giant’s reinstation of the 2023 financial guidance as well as the revelation of its plan to increase its dividend whilst also returning additional cash to shareholders through a stock buyback. The announcement of these three factors made the American company attractive to investors.

“After surpassing expectations on earnings and revenue in its Q3 report, Snapchat saw an uptick in its share price. In fact, the social media company’s revenue rose 5% year-over-year. What’s more, the stock’s upgrade from ‘hold’ to ‘buy’ by a Jefferies analyst, contributed significantly to its increase in value.

“On our most falling table last week, sugar witnessed a nosedive in its value. This is due to an increase in sugar production in Brazil, the world’s largest sugar producer, which subsequently undercut the price.

“The commodity’s price dropped following UNICA, Brazil’s sugar-cane industry association, announcing that production had increased by 31.0% in the first half of the month of November.

“What’s more, palladium’s value plummeted considerably following the combination of falling demand in China, as well as concerns over global economic growth, which have persisted throughout the year.

“Adding to this, following the reduction in OPEC’s output of crude oil, heating oil also plunged in value. However, it is important to note that given ongoing geopolitical conflicts, the change in these prices may be reflected in our rising and falling tables in future weeks.”