Fund managers say they are witnessing the most bullish environment for commodities they’ve seen in more than a decade, with base metals surging to multi-year highs and oil making one of its strongest starts to any year in at least the past 30 years.

The easing of global lockdowns, record stimulus spending and the roll-out of vaccines has fuelled demand for commodities across the board while tight supply has contributed to strong prices.

Investors fearful of a sharp rise in inflation are also looking to commodities as a safe haven, as they are price makers not price takers in an inflationary environment.

“We haven’t seen an environment this bullish for the last decade,” said Ausbil global resources fund portfolio manager Luke Smith. “We continue to believe we’re in the early stages of a multi-year cycle for commodities.”

The Bloomberg commodity spot index rose to its highest level since 2013 on Monday, driven by advances across base, bulk and precious metals as well as strength in energy markets.

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