Even the cloud of recession that has engulfed the world in recent years has a silver lining, according to a commodity price tracker by a leading bank.
Silver has shone as the best performing commodity over the past decade with a massive 572% rise in value since 2002, says the Lloyds TSB Private Banking Commodities Monitor.
The soaring price is due to investors considering the precious metal as a haven in times of troubled markets, as well as high demand from industry.
Silver is not the only outstanding performer – 15 of the 20 commodities tracked over the past 10 years have at least doubled in value.
Gold was the second best performer with a 428% price hike, followed by tin (414%), copper (406%) and lead (344%).
Beans jump in value
The price of gold has been sustained by demand from developing countries and investors seeking a safe haven for their cash.
Generally, commodity prices increased by 161% over the decade, recording more than 4.5 times the return from UK equities (35%) over the same period. The strong rise in commodity prices over the last 10 years partly reflects strong demand from emerging economies and the relatively weak US dollar.
Out of all commodities, precious metals performed best, rising by 358% since 2002, energy prices (268%) were second.
However, commodity prices have slipped back in the past 12 months, with average prices down 13%, reflecting global economic concern. Precious and base metals both dropped 19% in value, while energy saw a modest 3% increase.
Just six of the 20 commodities tracked have increased in value over the last 12 months.
Soya beans were the top performing commodity over the past year with a price rise of 24%. Wheat (soft red), at 19%, recorded the second biggest increase, followed by corn and crude oil (both 7%).
Black coffee
Coffee prices have tumbled by 41% over the past year as altering demand-supply conditions have helped to weaken prices.
Ashish Misra, Head of Investments at Lloyds TSB Private Banking, said: “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.”