Silver and gold prices rise highest over the past decade

James Qualtrough | September 17, 2012 | 0 Comments

Silver has been the best performing commodity over the past decade, according to new research by the Lloyds TSB Private Banking Commodities Monitor. Between 2002 and 2012, Silver prices have risen by 572%, significantly greater than any of the other commodities tracked. In addition to its position as a safe haven investment, high demand for industrial uses has also contributed to the strong rise in the price of silver.

Three quarters of the commodities tracked have more than doubled in value:
15 of the 20 commodities tracked have at least doubled in value since 2002. Gold, at 428%, saw the second highest increase, followed by Tin (414%), Copper (406%) and Lead (344%). Demand for gold from developing countries and investors looking to safeguard the value of their investments against a backdrop of economic uncertainty, rising oil prices and a weak dollar has helped to sustain the price of gold at a high level.

Commodity prices have risen by over 160% since 2002:
Commodity prices, in general, have risen by 161%1 over the past decade. In contrast, this is more than four and a half times the returns from UK equities2 (35%) over the same period. The strong rise in commodity prices over the last ten years partly reflects strong demand from emerging economies and the relatively weak US dollar.

At a sector level3 (i.e. precious metals, base metals, energy and agriculture), precious metals has been the best performing sector, rising by 358% since 2002. Energy prices, at 268%, were the second highest performing sector.

Commodity prices down by 13% over the last 12 months:
In contrast to the performance of the past decade as a whole, commodity prices have declined by 13% over the past year, reflecting the considerable uncertainty regarding the global economic outlook. At a sector level, precious and base metals have seen the biggest falls (both -19%), while agricultural commodities recorded the smallest decline (-2%).

Simon Prescott, head of islands corporate banking, Lloyds TSB International Wealth, commented:
“Commodity prices have risen significantly over the past decade, partly reflecting strong demand from emerging markets over the period. Precious metals were the best performing commodity, with their perceived position as a safe haven investment reinforced over recent years amid the financial market turmoil. However, with continued global economic uncertainty, commodity prices have weakened somewhat over the past year.

“Looking forward, commodity prices are likely to be driven by the level of demand from emerging economies such as China and India.”