The last time that happened, the gauge surged 36 percent in the next six months.
Commodities will rebound from the worst losing streak since the end of 2008 because shortages of everything from copper to palladium to corn will boost prices even if economic growth slows, should history be a guide.
The benchmark Standard & Poor’s GSCI index is heading for a second monthly drop, led by declines in silver, coffee and nickel. The last time that happened, the gauge surged 36 percent in the next six months. Speculators are holding a net 1.1 million U.S. futures and options contracts to bet on higher prices, 37 percent more than the average of the last five years, data from the Commodity Futures Trading Commission show.
“The long-term perspective is that many commodities have supply constraints,” said Walter “Bucky” Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama, and favors gold because it will gain from financial stimulus by central banks and inflation. “That’s an environment where you want commodities in your portfolio.”