Swedbank’s Total Commodity Price Index rose for the second consecutive month. This means that the index has risen by slightly over 3% this year in US dollars. Metal prices increased broadly in August, which shows that global industry is still maintaining a fairly good growth rate. Although global growth prospects have been downgraded for 2011, emerging economies will still need industrial metals, though at a slower rate. The prices of copper and lead, which are in fairly tight supply, could rise further. For industrial metals, where there is excess supply, prices will stabilise or fall, especially since the global inventory build-up is expected to taper off. Record-high gold prices are an indication of growing uncertainty about the strength of the global economy. Large public deficits and fears of another slowdown have caused more investors to turn to gold. We do not believe that gold prices have peaked, and that this will remain true as long as global imbalances remain unresolved. Unfavourable weather conditions and lower production contributed to a rise in the food price index for the third consecutive month. Grain prices have risen by 23% in two months. The risk of a new global food crisis after several years of good harvests and expanded production capacity is unlikely, however.

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