Given the global reach of commodities, commodity prices have many drivers. However, some of the key influencing factors include: Global economic health: The health of the global economy can directly impact the supply and demand of commodities, influencing prices. In particular, developments in China and the US often have an outsized influence as they are the world’s two largest global economies by gross domestic product (GDP), which measures the total value of a country's finished goods and services. Green transition and climate volatility: Contrary to popular belief, the energy transition/decarbonisation trend is supportive of commodity prices. Metals, like copper, aluminium, zinc and nickel are playing a significant role in the transition to renewable energy, yet efforts to reduce carbon emissions are significantly constraining supplies. This combination of growing demand and tightening supply could potentially create sustained global deficits in the metals sector for years — possibly decades — to come. The growing application of environmental, social, and governance (ESG) considerations in investment solutions has also led to significant underinvestment in fossil fuels, such as oil and gas, stunting supply growth while global demand continues to climb. Extreme weather events may continue to upend supplies in the agricultural sector. Furthermore, there may be increased demand for agricultural commodities to be used as ‘energy crops' for ethanol and biodiesel. Geopolitics: Rising geopolitical tension, especially between significant players in this market, can lead to heightened uncertainty and volatility for prices, as we saw play out following Russia’s invasion of Ukraine. Tensions between the US and China have also been rising, which could potentially rewrite existing global trade routes.