Commodity-linked products seen as suitable hedge as inflation fears take hold of markets

Singapore

INFLATION fears have been sweeping over markets, as countries around the world begin reopening their economies after the Covid-19 pandemic. Some market strategists say commodities could be a suitable hedge in an investor's portfolio, and could even be entering a supercycle fuelled by structural demand. But there are also warnings of risks from volatility as well as the still-uncertain longevity of present inflationary pressures.

Ole Hansen, global head of commodity strategy at Saxo Markets, said the current combination of rising inflation and a global economic recovery means the commodity sector has become a "favourite go-to market for hedging opportunities".