The next six months may prove a pivotal turning point in the recovery of global commodities markets, said an industry expert.

Following nine months of geo-political incidents in Europe and the Middle East, and widespread uncertainty catalysed by major economic crises in Greece, Russia and China, the next three months will see a soothing of relentless turbulence across global markets going into 2016, added Ole Sloth Hansen, head of Commodity Strategy at Saxo Bank, the online trading and multi-asset investment specialist.

Speaking from Saxo Bank’s office in Dubai International Financial Centre (DIFC), Hansen said: “There is light at the end of a very long tunnel, not least for oil and precious metals. Gold has demonstrated its strength in recent weeks and oil markets have begun to stabilise as non-Opec supply drops and demand remains robust as the economic benefits of lower oil prices kick-in across many oil consuming nations.”

“Although commodity gains from the Chinese boom years have largely been wiped out, oil, gold and silver have proven their resilience multiple times in the past and will do so again. Rising supply has spawned low prices, but the best cure for low prices are low prices. There is genuine optimism that we’ll be sitting here looking at a very different picture for global commodities markets in 12 months’ time – the outlook is cautious but positive.”

While there are challenges ahead - specifically the impact of the much-anticipated rate hike by the US Federal Reserve – Hansen believes last week’s decision by the Federal Open Market Committee (FOMC) to delay any hike until December will ease volatility in the short-term.

“While US activity and employment data remains strong, the developments in commodities, extreme market volatility in late August and the Chinese exchange rate policy distracted, has distracted and sufficiently alarmed the Fed. It’s sitting on its hands - for now,” said Hansen.

“Failing oil prices and deflation are legitimate concerns and the last thing the Fed wants is to tighten its belt and then find it has to loosen it again a few months later. The anxiety means there is room for a marginal commodities recovery this year before uncertainty grows again in the run-up to the FMOC’s December meeting,” he added.

During his Dubai visit, Hansen also outlined his thoughts on several major milestones achieved by the Danish investment specialists during 2015.

Top of Hansen’s list were the international launch and roll-out of the SaxoTraderGO platform – Saxo Bank’s new and intuitive, multi-asset trading platform – as well as the launch of a dedicated Arabic website, a key asset in the Bank’s drive to encourage and empower retailers and investors across the Middle East. – TradeArabia News Service