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In 2024, elections of national significance will occur in countries that represent 42% of the global population and more than 40% of the worldwide gross domestic product.[1]

The political landscape could look very different by December of this year. Two of history's most unpopular presidential candidates may run against each other in the United States. One of them, Donald Trump, recently won the Iowa primaries by almost three times the amount of the next highest landslide margin. Outside the US, there are elections of global significance in India, Indonesia, Pakistan, Russia, South Korea, Mexico, Taiwan, South Africa, and the UK.

The economic risk around these elections should certainly be on investors' radar, ...

The economic risk around these elections should certainly be on investors’ radar, given the outcome of the 15th BRICS2 summit last August. Six additional countries were accepted into the BRICS organization at the meeting, including Egypt, Ethiopia, Saudi Arabia, Iran, Argentina, and the United Arab Emirates. Several of which are in fact unlikely allies. Egypt and Ethiopia have been in an ongoing dispute that started in 2010 over the Grand Ethiopian Renaissance Dam3, which Egypt believes violates a 1959 treaty on water rights for the Nile River. Iran and Saudi Arabia have been in regional conflicts since 1979 that have occasionally escalated to proxy military confrontations. More than 40 additional countries applied for BRICS membership by the end of the meeting.

The Council of Foreign Relations4 states, “The slew of applications to join BRICS is clearly a symptom of a deeper malaise. The West's proclivity to deploy unilateral financial sanctions, abuse international payment mechanisms, renege on climate finance commitments, and accord scant respect to food security and health imperatives of the Global South during the pandemic are only some of the elements responsible for the growing disenchantment with the prevailing international system.”

The US has used the international payment system (SWIFT)5 as an arm to enforce US foreign policy under Presidents Bush, Obama, Trump, and Biden. It is no wonder developing countries wish to diversify their risk of US sanctions by diversifying away from the US dollar at the margin. Reducing a country's foreign exchange holdings of US dollars and US treasuries at the margin is not the 'end of the dollar.' However, it does have implications for the price of the asset they are replacing the dollar with.

Electorate changes and higher sanctions risks in 2024 have us looking at some of the commodities that could see an upside due to changing supply chain economics.

Electorate changes and higher sanctions risks in 2024 have us looking at some of the commodities that could see an upside due to changing supply chain economics.

What we’re watching

The following are the commodities we have our eyes on in 2024, and why.

Gold

Foreign central banks continue to be significant buyers of gold to diversify foreign exchange holdings. ETF investors selling gold in massive numbers (21 million ounces from April 2022 to October 2023) stopped the large selling in early October6, kicking off a gold price rally of 13% into year-end7.

Oil

Oil demand typically falls as the calendar flips from Q4 into Q1 by 1.5–2.5 million barrels per day for seasonal reasons. However, the energy transition is still in its infancy and has not deterred the long-term trend over the last 50 years, which averaged 1.5 million barrels per day of yearly demand growth.

Oil supply has increased slightly in the US and Guyana but has been cut back by OPEC8 countries. Oil prices have not had strong upside price trends, which has pushed momentum investors like commodity trading advisors out of the commodity. This can be seen in CFTC9 data, where net positioning is at only 170,000 contracts10. That's a level only seen for two brief periods in 2023, a brief period in early 2016 and pre-2013. That isn't consistent with the current level of geopolitical risk.

Copper

There is a wide range of estimates on electric vehicle (EV) sales levels over the next ten years, and interest rates and economic conditions can alter those significantly. The level of EV sales will affect copper demand from automobile sources. However, it is one of many demand sources that overlooks the need for greatly expanded grid capacity for an electrified future. Copper supply projections also have a wide range of estimates, although supply estimates have been decreasing over the last two months. Lower supply is generally bullish for the price, all else being equal, and Citigroup believes copper could reach $15,000 per ton in 2025 under the right conditions11. The current price is $8,354.50 per ton12.

Platinum and palladium

EV sales are not meeting estimates as higher interest rates, higher credit card debt, and some EV idiosyncrasies deter some buyers. Lost sales of EVs translate into higher sales for internal combustion engine and hybrid vehicles, which use platinum and palladium for pollution control in catalytic converters.

A 2024 survey by Deloitte13 revealed US consumer preference for their next vehicle powertrain is 67% incombustible carbon engines (ICE), 16% hybrid electric, and 5% plug-in hybrid, all of which require a catalytic converter that uses either platinum or palladium14.

It would seem to be news to the platinum and palladium market that 88% of those surveyed want a vehicle that needs a platinum or palladium auto catalyst. Platinum and palladium join oil in the potentially oversold category from our point of view. While it is true that a world full of EVs needs fewer catalytic converters and, therefore, auto catalyst metal demand may fall, it is also true that higher ICE sales mean higher auto catalyst metal demand like platinum and palladium.

Final thoughts

In 2023, investors were focused on interest rate policymaker decisions. However, this year we believe it would be wise if investors focus on decisions being made in voting booths around the world. The potential change in trading policies, alliances, and sanctions may have an effect on commodity prices. Negative sentiment appears overdone in oil, copper, platinum, and palladium while improvements in demand for gold from central banks and ETF investors warrants attention.

1 abrdn, CIA World Factbook, 2023.
2 Prior to the August 2023 meeting, members consisted of Brazil, Russia, India, China, and South Africa.
3 Grand Ethiopian Renaissance Dam is expected to be the largest hydroelectric power plant in Africa from the Blue Nile River, one of the two main tributaries of the Nile River.
4 Council of Foreign Relations is an independent nonpartisan member organization think tank and publisher.
5 The Society for Worldwide Interbank Financial Telecommunication (SWIFT) system provides worldwide financial transaction and payment services.
6 Bloomberg, as of December 31, 2023. Bloomberg data in ETF global gold flow in ounces in aggregate stopped on October 5, 2023.
7 Bloomberg data gold price return for the period October 5, 2023, through December 31, 2023.
8 The Organization of Petroleum Exporting Countries (OPEC) refers to a group of 12 oil exporting countries.
9 The Commodity Futures Trading Commission (CFTC) is an independent agency of the US government that regulates US derivatives markets, including futures, swaps, and certain options.
10 Bloomberg, CFTC, as of January 9, 2024. “Net non-commercial WTI contracts.”
11 "Copper could skyrocket over 75% to record highs by 2025 — brace for deficits, analysts say." CNBC, January 2024. https://www.cnbc.com/2024/01/03/copper-appears-set-to-rally-more-than-75percent-by-2025-analysts-say.html.
12 Bloomberg, as of January 16, 2024.
13 Deloitte multinational professional services group, considered one of the “Big Four” accounting firms.
14 "2024 Global Automotive Consumer Study." Deloitte, 2024. https://www2.deloitte.com/us/en/pages/consumer-business/articles/global-automotive-consumer-study.html.

Important information

The statements and opinions expressed are those of the author and are as of the date of this report. All information is historical and not indicative of future results and subject to change. Reader should not assume that an investment in any securities and/or precious metals mentioned was or would be profitable in the future. This information is not a recommendation to buy or sell. Past performance does not guarantee future results.

Trading in commodities entails a substantial risk of loss and is not suitable for all investors.

Diversification does not eliminate the risk of experiencing investment losses.

Prospectuses for abrdn Physical Gold Shares ETF, abrdn Physical Palladium Shares ETF, abrdn Physical Platinum Shares ETF, abrdn Physical Precious Metals Basket Shares ETF and abrdn Physical Silver Shares ETF

Projections are offered as opinion and are not reflective of potential performance.

Projections are not guaranteed, and actual events or results may differ materially.

ALPS Distributors, Inc. is the marketing agent.

There are risks associated with investing including possible loss of principal.

ALPS is not affiliated with abrdn.

ETF002134 12/31/24
AA-190124-173003-1

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Investors should carefully consider a fund’s investment objectives, risks, fees, charges, and expenses before investing any money. To obtain this and other fund information, please call 866-667-9231 to request a summary prospectus and/or prospectus, or download at www.abrdn.com/us. Please read the summary prospectus and/or prospectus carefully before investing any money.

Aberdeen Fund Distributors, LLC is a wholly owned subsidiary of abrdn Inc. abrdn Inc. is a wholly-owned subsidiary of abrdn plc. abrdn Funds are distributed by Aberdeen Fund Distributors LLC, Member FINRA and SIPC. 1900 Market Street, Suite 200, Philadelphia PA, 19103.

NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE

For ETFs, please call 844-383-7289 or click here to access a prospectus online. Investing involves risk, including possible loss of principal. ETF shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund.

Important Risks

The abrdn Gold ETF Trust, abrdn Silver ETF Trust, abrdn Precious Metals Basket ETF Trust, abrdn Platinum ETF Trust and abrdn Palladium ETF Trust are not investment companies registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act. Shares of the Trusts are not subject to the same regulatory requirements as mutual funds. These investments are not suitable for all investors. Trusts focusing on a single commodity generally experience greater volatility.

Commodities generally are volatile and are not suitable for all investors. Trusts focusing on a single commodity generally experience greater volatility. Please refer to the prospectus for complete information regarding all risks associated with the Trusts. Shares in the Trusts are not FDIC insured and may lose value and have no bank guarantee.

The value of the Shares relates directly to the value of the precious metal held by the Trust and fluctuations in the price could materially adversely affect investment in the Shares. Several factors may affect the price of precious metals, including:

A change in economic conditions, such as a recession, can adversely affect the price of the precious metal held by the Trust. Some metals are used in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the Shares;

Investors’ expectations with respect to the rate of inflation;

Currency exchange rates;

Interest rates;

Investment and trading activities of hedge funds and commodity funds; and

Global or regional political, economic or financial events and situations. Should there be an increase in the level of hedge activity of the precious metal held by the trust or producing companies, it could cause a decline in world precious metal prices, adversely affecting the price of the Shares. Should there be an increase in the level of hedge activity of the precious metal held by the Trusts or producing companies, it could cause a decline in world precious metal prices, adversely affecting the price of the shares.

Also, should the speculative community take a negative view towards the precious metal held by the Trusts, it could cause a decline in prices, negatively impacting the price of the shares. There is a risk that part or all of the Trusts’ physical precious metal could be lost, damaged or stolen. Failure by the Custodian or Sub-Custodian to exercise due care in the safekeeping of the precious metal held by the Trusts could result in a loss to the Trusts.

The Trusts will not insure its precious metals and shareholders cannot be assured that the custodian will maintain adequate insurance or any insurance with respect to the precious metals held by the custodian on behalf of the Trust. Consequently, a loss may be suffered with respect to the Trust’s precious metal that is not covered by insurance.

Commodities generally are volatile and are not suitable for all investors.

Investors buy and sell shares on a secondary market (i.e., not directly from Trusts). Only market makers or "authorized participants" may trade directly with the Trusts, typically in blocks of 25k to 100k shares.

Commodities generally are volatile and are not suitable for all investors. This material must be accompanied or preceded by the prospectus. Carefully consider each Trust’s investment objectives, risk factors, and fees and expenses before investing. Please click here to review the prospectus.

ALPS Distributors, Inc. is the marketing agent for the abrdn Gold ETF Trust, abrdn Silver ETF Trust, abrdn Precious Metals Basket ETF Trust, abrdn Platinum ETF Trust and abrdn Palladium ETF Trust.

ALPS Distributors, Inc. is the distributor for abrdn ETFs.

ALPS Distributors, Inc. is not affiliated with the companies of abrdn.

'40 Act Fund Disclosure:

An investor should consider the investment objectives, risks, charges and expenses of the ETFs carefully before investing. To obtain a prospectus containing this and other important information, call 1-844-383-7289 or visit www.abrdn.com/us/etf. Read the prospectus carefully before investing.

Fund Risk: There are risks associated with investing including possible loss of principal. Commodities generally are volatile and are not suitable for all investors. There can be no assurance that the Fund’s investment objective will be met at any time. The commodities markets and the prices of various commodities may fluctuate widely based on a variety of factors. Because the Fund's performance is linked to the performance of highly volatile commodities, investors should consider purchasing shares of the Fund only as part of an overall diversified portfolio and should be willing to assume the risks of potentially significant fluctuations in the value of the Fund. Actively managed ETFs do not necessarily seek to replicate the performance of a specified index. Actively managed ETFs are subject to risks similar to stocks, including those related to short selling and margin maintenance. The Fund’s return may not match the return of the index.

Through holding of futures, options and options on futures contracts, the Fund may be exposed to (i) losses from margin deposits in the case of bankruptcy of the relevant broker, and (ii) a risk that the relevant position cannot be close out when required at its fundamental value. In pursuing its investment strategy, particularly when rolling futures contracts, the Fund may engage in frequent trading of its portfolio of securities, resulting in a high portfolio turnover rate.
As a "non-diversified" fund, the Fund may hold a smaller number of portfolio securities than many other funds. To the extent the Fund invests in a relatively small number of issuers, a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a larger number of issuers. The value of Shares may be more volatile than the values of shares of more diversified funds.

During situations where the cost of any futures contracts for delivery on dates further in the future is higher than those for delivery closer in time, the value of the Fund holding such contracts will decrease over time unless the spot price of that contract increases by the same rate as the rate of the variation in the price of the futures contract. The rate of variation could be quite significant and last for an indeterminate period of time, reducing the value of the Fund.

Changes in the laws of the United States and/or the Cayman Islands, under which the Fund and the Subsidiary are organized, respectively, could result in the inability of the Subsidiary to operate as intended and could negatively affect the Fund and its shareholders.

To the extent the Fund is exposed directly or indirectly to leverage (through investments in commodities futures contracts) the value of that Fund may be more volatile than if no leverage were present.

In order to qualify for the favorable U.S. federal income tax treatment accorded to a regulated investment company ("RIC"), the Fund must derive at least 90% of its gross income in each taxable year from certain categories of income ("qualifying income") and must satisfy certain asset diversification requirements. Certain of the Fund’s investments will not generate income that is qualifying income. The Fund intends to hold such commodity-related investments indirectly, through the Subsidiary. The Fund believes that income from the Subsidiary will be qualifying income because it expects that the Subsidiary will make annual distributions of its earnings and profits. [However, there can be no certainty in this regard, as the Fund has not sought or received an opinion of counsel confirming that the Subsidiary’s operations and resulting distributions would produce qualifying income for the Fund.] If the Fund were to fail to meet the qualifying income test or asset diversification requirements and fail to qualify as a RIC, it would be taxed in the same manner as an ordinary corporation, and distributions to its shareholders would not be deductible by the Fund in computing its taxable income. Investors buy and sell shares on a secondary market (i.e., not directly from the Trust). Only market makers or authorized participants may trade directly with the funds, typically in blocks of 25K to 100K shares.

The abrdn Bloomberg Industrial Metals K-1 Free ETF is new and has limited operating history.

“Bloomberg®” and “Bloomberg Commodity Index Total ReturnSM,” “Bloomberg Commodity Index 3 Month ForwardSM” and “Bloomberg Industrial Metals Subindex Total ReturnSM” are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the indices (collectively, “Bloomberg”) and have been licensed for use for certain purposes by abrdn ETFs Advisors LLC. Bloomberg is not affiliated with abrdn ETFs Advisors LLC, and Bloomberg does not approve, endorse, review, or recommend abrdn Bloomberg All Commodity Strategy K-1 Free ETF (BCI), abrdn Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF (BCD), and abrdn Bloomberg Industrial Metals K-1 Free ETF (BCIM). Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to Bloomberg Commodity Index Total Return, Bloomberg Commodity Index 3 Month Forward” and “Bloomberg Industrial Metals Subindex Total Return".

Please see the current prospectus, www.abrdn.com/us/etf for more information regarding the risk associated with an investment in the Funds.

S&P 500: The S&P 500 Index is the Standard & Poor’s composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices.

Standard Deviation: Standard deviation is a statistical measure of the extent to which returns of an asset vary from its average.

Bloomberg Commodity Index: The Bloomberg Commodity Index (BCOM) is a broadly diversified commodity price index distributed by Bloomberg Indexes.

Discount- A situation when the share price of a fund trades below its net asset value.

Premium- A situation when the share price of a fund trades above its net asset value.

The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market.

Annualized Volatility is a statistical measure of the dispersion of returns for a given security or market index

Beta is a measure of the volatility, or systematic risk, of an individual stock in comparison to the unsystematic risk of the entire market

Sharpe ratio is the average return earned in excess of the risk-free rate per unit of volatility or total risk
NAV or Net Asset Value represents the per share/unit price of the fund on a specific date or time.

All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments there are associated inherent risks. Please obtain and review all financial material carefully before investing.

abrdn offers a variety of products and services intended solely for investors from certain countries or regions. abrdn does not offer these products or services outside their intended countries or regions. Your country of legal residence will determine the products or services that will be available to you. Nothing on this website should be considered a solicitation or offering for sale of any investment product or service to any person in any jurisdiction where such solicitation or offer would be unlawful.

Persons residing outside the United States are invited to visit our global website for more information about products and services available to non-U.S. investors.

Alternative investments involve specific risks that may be greater than those associated with traditional investments; are not suitable for all clients; and intended for experienced and sophisticated investors who meet specific suitability requirements and are willing to bear the high economic risks of the investment. Investments of this type may engage in speculative investment practices; carry additional risk of loss, including possibility of partial or total loss of invested capital, due to the nature and volatility of the underlying investments; and are generally considered to be illiquid due to restrictive repurchase procedures. These investments may also involve different regulatory and reporting requirements, complex tax structures, and delays in distributing important tax information.

Diversification does not ensure a profit or protect against a loss in a declining market.

Among the risks presented by private equity investing are substantial commitment requirements, credit risk, lack of liquidity, fees associated with investing, lack of control over investments and or governance, investment risks, leverage and tax considerations. Private equity investments can also be affected by environmental conditions / events, political and economic developments, taxes and other government regulations

Property investments may carry additional risk of loss due to the nature and volatility of the underlying investments and may not be available for investment by investors unless the investor meets certain regulatory requirements. In considering the prior performance information contained herein, potential investors should bear in mind that past performance is not necessarily indicative of future results, and there can be no assurance that such investments will achieve comparable results.


UNITED STATES RESIDENTS

The purpose of this website is to provide general information about the US-registered investment advisers which are part of abrdn, and the strategies they manage. The information provided is not intended as an offer or solicitation for the purchase or sale of any financial instrument.

Past performance is not indicative of future results, and there can be no guarantee as to the accuracy of market forecasts. Opinions, estimates, and forecasts may be changed without notice. This site does not provide financial or investment advice and does not take into account the particular financial circumstances of individual investors. Before investing, investors should seek their own professional advice. The views and opinions expressed are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendations for, any person. We suggest that you consult your financial or tax advisor, accountant, or attorney with regard to your specific situation.

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