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November proved to be a good month for risk assets, including commodities. The headline S&P GSCI rose 12.0%, outperforming the S&P 500®, which gained 10.8%. Promising developments on the COVID-19 vaccine front, as well as a benign outcome in the U.S. elections, rewarded risk assets such as energy and industrial metals, while safe-haven assets like gold lost some luster.

The petroleum complex benefited from the prospect of a revival in demand should COVID-19 vaccines allow travel, transport, and other business activities to resume in the first few months of 2021. The S&P GSCI Petroleum gained 25.1%, though the recovery in prices started from a low and pessimistic base, with the index still down 49.9% YTD. On the last day of the month, OPEC+ postponed talks on oil output levels to Dec. 3, 2020, citing a lack of consensus between members regarding the proposed easing of production cuts starting January 2021.

The S&P GSCI Industrial Metals rose 11.1% in November, with all components contributing positive performance. The S&P GSCI Lead paved the way, up 13.6%, hitting a one-year high. This magnitude is unusual, given it is typically the least volatile of the industrial metals, but reflects an appetite for assets sensitive to economic growth prospects. The S&P GSCI Iron Ore rose 14.6% on the back of strong demand from Asia. The other red metal, S&P GSCI Copper, rose 12.8% to its highest level since May 2013. Positive prospects for renewable energy and electric vehicles, encouraging COVID-19 vaccine news, and China’s factory utilization rates’ rapid expansion provided an impetus for the red metal to move higher.

One casualty of the rush to risk in November was gold; the S&P GSCI Gold fell 5.6% and ended the month near a five-month low. While flows into physically backed ETFs remained positive, the 20.3 metric tons added in October was the smallest monthly increase since December 2019, reflecting a cooling in investor interest in safe-haven assets.

The S&P GSCI Soybeans continued its strong performance for the quarter by rising 10.6% in November. Brazil made a rare purchase of soybeans from the U.S. due to domestic supplies diminishing after making large sales to China. Cocoa and coffee prices both rose by double digits in November. Cocoa prices more than recovered from last month’s slump, with the S&P GSCI Cocoa jumping 18.8% on the back of Hershey sourcing a large volume of beans from the futures market instead of physical sellers. The S&P GSCI Coffee rose 15.2% following fears of adverse weather in Brazil and Central America.