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Speculation and fundamentals drive resources rally

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The extraordinary rally in commodities is being driven both by fundamentals and speculation, but experts are divided as to its sustainability.

The last time Fortescue Metals Group shares traded above $6 a share five years ago, iron ore was selling at close to $US120 a tonne, well above the current price of $US75 a tonne. The roaring return for Australian mining stocks has outpaced the recovery of their respective commodities.

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Vanessa Desloires writes on markets from our Melbourne newsroom. Connect with Vanessa on Twitter.

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    Original URL: https://www.afr.com/markets/equity-markets/speculation-and-fundamentals-drive-resources-rally-20161124-gsw98k