CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Biden infrastructure plans could see miners surge once more

Miners have been easing back on fears that China would withdraw stimulus, yet a planned $3 trillion infrastructure plan from Biden highlights a potential resurgence for the sector

Commodities pause, but could resume from here

2020 was a positive one for commodity prices, with Chinese industrial expansion helping to make up for economic weakness around the globe. Even ‘Dr Copper’ has managed to see a huge expansion despite the clear lack of growth evident over the course of 2020.

Nevertheless, while services were hit hard, manufacturing has managed to get back into a more positive position thanks to financial support on the government level. So much so that the German manufacturing sector just posted a record 66.6 manufacturing purchasing managers index (PMI) reading.

Nevertheless, while 2020 industrial strength helped drive upside for commodity prices, we have seen significant questions arise since as traders consider a potential withdrawal of stimulus from the likes of China.

Biden plans highlight commodity super-cycle claims

Recent claims that we are on the cusp of a commodity super-cycle are driven by huge green infrastructure plans throughout the Western world.

That will be brought into the limelight once again in the coming week as US President Joe Biden lays out plans for a whopping $3 trillion infrastructure bill.

Whether that gains approval or not remains to be seen, but it does highlight the huge amount of raw materials that will be required as countries spend big in the name of energy transition.

While some believe China could ease back a little on their expansion, it seems likely that their insatiable desire for growth will continue to necessitate substantial imports of key commodities.

Meanwhile, major infrastructure plans in the Western world add further fuel to that fine.

Bullish momentum could be growing for FTSE miners

The relative rotation graph is a key tool for traders seeking to understand which stocks could come into and out of fashion at any given period of time.

Interestingly, we can see that miners BHP Group, Rio Tinto, Anglo American, and Glencore are all reversing up towards the ‘improving section.

That highlights the potential for future outperformance for the sector, tying up with the increased focus on infrastructure spending growth in the US. As such, keep an eye out for future strength in the mining sector following a period of consolidation.

Pullback brings potential buying opportunity

The chart below highlights the performance of the likes of Anglo American, BHP Group, Rio Tinto, and Glencore against the price of copper and iron ore.

All those markets retain a trend of higher highs and higher lows despite recent losses. As such, the current pullback looks to be a retracement within a uptrend.

As such, until we see a break below the prior swing-low, the current pullback is expected to mark a strong buying opportunity for mining stocks.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

React to volatility on commodity markets

Trade commodity futures, as well as 27 commodity markets with no fixed expiries.

  • Wide range of popular and niche metals, energies and softs
  • Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
  • View continuous charting, backdated for up to five years

See opportunity on a commodity?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a commodity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Analyse and deal seamlessly on fast, intuitive charts
  • Get spreads from just 0.3 points on Spot Gold
  • See and react to breaking news in-platform

See opportunity on a commodity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.