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Calmest market in over a decade, according to VIX

LiveMint logoLiveMint 03-04-2017 Livemint

The CBOE Volatility Index, also known as the VIX, is closing in on its lowest quarterly average since the final months of 2006, points out a Bloomberg report.

The measure has lost 18% this year through Thursday as the S&P 500 Index climbed 5.8%.

Just a week ago, it looked as if the dormant index was awakening. But that has changed in end-March.

A moot question is if it is the proverbial calm before the storm.

Metals enjoy longest rally in seven years

Metals were one of the best investments in 2016, and that’s turning out to be true again this year.

An index of the six major metals rose for the fifth straight quarter, the longest stretch of gains since 2010. Gold is up 8.8%, the best performance in a year.

Subrata Jana/Mint

For comparison, global equities are up about 6% for the quarter. Palladium jumped 17%, reaching the highest price since March 2015; aluminum added 16%; lead rose 16% and silver advanced almost 15%.

More money is flowing into commodities as investors search for investments that can keep up with faster inflation, and metals such as copper face supply shortages. The weaker dollar and lower inflation-adjusted yields, also known as real yields, have made alternative assets more appealing.

Oil caps biggest weekly gain on Opec move

Oil capped its biggest weekly increase this year amid speculation that the Organization of Petroleum Exporting Countries, or Opec, will extend its deal to curb output and ease a global glut.

Futures advanced 5.5% in New York this week, climbing back above $50 a barrel after Kuwait oil minister Issam Almarzooq reiterated support for prolonging a six-month deal to trim supply past June.

The market also rose after a US government report showed the nation’s refineries boosted crude use by the most in almost three years, while fuel supplies fell. Still, prices are down about 6% for the first three months of 2017, the biggest quarterly loss since late 2015.

The latest comments from Kuwait’s oil minister are bolstering confidence in Opec’s commitment to drain swollen stockpiles ahead of the group’s next formal ministerial meeting on 25 May in Vienna.

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