The rise in raw material prices is hampering the efforts of major central banks to curb inflation. The Bloomberg Commodity Spot Index (Bloomberg Commodity Spot Index) rose slightly on Wednesday to its highest level since April 2023.

Since this year, commodity prices have continued to rise, driven by factors such as supply disruptions in some markets, heightened geopolitical tension, and hedging the risk of higher inflation over a longer period of time. Crude oil — one of the largest components of the Bloomberg Commodity Spot Index — was boosted by strong demand and concerns about crude oil supply in the Middle East. Precious metals such as gold and silver have attracted the interest of risk-averse investors. Copper prices have also been boosted by tight supply.

Sam Vogel, chief operating officer at Cayler Capital, previously stated: “Overall, higher commodity prices reflect an environment in the latter half of the economic cycle, where demand is still strong, but supply constraints are evident.” As far as crude oil is concerned, he added, “there will be a very strong balance between supply and demand in the second half of this year.”

However, the Bloomberg Commodity Spot Index is still below the peak hit in the summer of 2022. At that time, large-scale stimulus spending and widespread supply chain bottlenecks drove up raw material prices, with gas and grain prices rising most strongly.