Orange juice, rice, and gold, the three commodities of 2020

Gold, like other precious metals such as silver or platinum, shares its status as an investment asset. Among the commodities that have been appreciated the most in 2020, the precious metal is in third place.

Materials Risk, a consulting company on commodity market analysis and risk management, stated that now that three months have passed since the coronavirus outbreak, it is time to analyze the impact of it on the commodities market.

The study conducted by the company revealed that, so far, in 2020, gold prices increased by 14%. Gold acted as a haven against the crisis and the distrust of investors in the evaluation of other assets.

The other two commodities, which were much appreciated this year, have been orange juice and rice. These commodities, along with palladium and oats, have been the only ones that have seen an increase in price so far this year.

Gold and palladium are the only metals that maintained a positive trajectory in 2020. Both silver (-1%) and platinum (-9%) have experienced a drop in their prices at the beginning of the year.

Energy commodities, such as oil, natural gas, and fuel prices, in general, have plunged. Oil prices decreased by more than 40% since the beginning of the year.  

According to another study, the commodity data reflects enormous volatility. Some of the markets experienced significant declines in the first two weeks of March. The slump in energy demand caused panic among investors, who were quick to liquidate their positions in precious metals to cope with losses in other assets.

Unfavorable weather in Brazil contributed to the rise in orange juice prices

Materials Risk explains why orange juice prices increased. The ideal defense against the pandemic has been a citrus drink. Orange juice seems to have regained its status as a natural product that boosts the immune system. What’s more, consumers have hoarded the drink instead of fresh oranges. There had been a concern that there could be a shortage in supermarkets.

Another factor that has contributed to the rise in prices of orange juice has been the adverse weather in Brazil, one of the world’s largest producers of the commodity. Despite the increase in the cost of orange juice, its price is still 50% lower than its maximum in October 2016.

However, gold is seeing its highest rates in the last seven years. It is forecast to exceed its historical high recorded in 2011, over 1,900 an ounce.