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Speculation and fundamentals drive resources rally

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