Natural gas meets AI demand while silver shines amid supply deficits.

  • Silver and natural gas are leading the commodities rally in September.
  • Natural gas prices surged 29.4% month-to-date due to tightening supplies and increased demand from AI data centers.
  • Silver reached a nearly 12-year high, supported by industrial demand and supply deficits.
  • The Bloomberg Commodity Index rose 4.3% in September, marking its first monthly gain since May.
  • Analysts predict continued growth in electricity demand, particularly from AI and data centers.

In September, commodities have experienced a notable rally, with silver and natural gas emerging as standout performers. Adam Koos, president of Libertas Wealth Management Group, likened the commodities market to a long-distance race, where participants finally accelerated after a period of steady pacing. Natural gas has been particularly impressive, likened to a sprinter gaining momentum as cooler weather sets in and demand from artificial intelligence (AI) data centers begins to rise. While it’s still early to determine the full impact of AI on natural gas demand, the potential is evident. nnSilver, on the other hand, has been a consistent performer, akin to an Olympic gold medalist, benefiting from easing inflation concerns and increased industrial demand. The Bloomberg Commodity Index, which tracks 24 physical commodities, has risen 4.3% this month, marking its first monthly gain since May. Notably, natural gas, sugar, coffee, and silver have been among the biggest gainers in this sector. nnNatural gas prices have surged by 29.4% month-to-date, reaching $2.90 per million British thermal units. This increase is attributed to tightening supplies and a growing demand from power producers, particularly as utilities prepare for winter. The Baker Hughes rig count indicates that the number of active gas rigs is at its lowest since 2021, further contributing to the price rebound. nnThe demand for electricity is expected to grow significantly, with projections indicating a 2.2% increase in 2023 and an average annual growth of 3.4% through 2026. While data centers currently consume only a small percentage of U.S. power, their demand is anticipated to double by 2026, positioning natural gas as a key player in meeting this need. nnMeanwhile, silver has climbed to a nearly 12-year high, driven by structural supply deficits and strong industrial demand. Peter Spina, founder of GoldSeek.com and SilverSeek.com, notes that silver prices are supported by the ongoing demand for green metals. As of Thursday, silver futures reached $33.02 an ounce, marking an 11% gain for the month. Despite previous concerns about demand due to global growth risks, silver has started to catch up with gold, especially in light of potential Chinese stimulus measures. nnInvestors should be aware that silver prices can be volatile, and while current conditions suggest potential for rapid price increases, caution is advised. Spina emphasizes that silver priced under $30 an ounce appears cheap, indicating more upside potential than downside risk.·

Factuality Level: 7
Factuality Justification: The article provides a detailed analysis of the commodities market, particularly focusing on silver and natural gas. While it includes expert opinions and market dynamics, some statements may reflect personal perspectives rather than universally accepted facts. Additionally, the use of metaphors and analogies, while engaging, could detract from the objective reporting expected in a news article. Overall, the article is informative but contains elements that could be seen as subjective.·
Noise Level: 7
Noise Justification: The article provides a detailed analysis of the commodities market, particularly focusing on silver and natural gas, and includes expert opinions and data to support its claims. It discusses the implications of AI on natural gas demand and the dynamics affecting silver prices, which adds depth. However, some sections could be seen as overly reliant on quotes and metaphors, which may detract from the scientific rigor and intellectual honesty expected in financial reporting.·
Public Companies: Baker Hughes (BKR), Vistra ()
Private Companies: Libertas Wealth Management Group,Velandera Energy Partners,GoldSeek.com,SilverSeek.com,Zaner Metals
Key People: Adam Koos (President), Manish Raj (Managing Director), Peter Spina (Founder and President), Peter Grant (Vice President and Senior Metals Strategist)

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Financial Relevance: Yes
Financial Markets Impacted: The article discusses the performance of commodities, particularly natural gas and silver, which are impacting financial markets through price fluctuations and demand dynamics.
Financial Rating Justification: The article focuses on the commodities market, detailing price movements and factors affecting supply and demand, which are critical to financial markets and investment strategies.·
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: The article discusses the performance of commodities, particularly silver and natural gas, but does not report on any extreme event that occurred in the last 48 hours.·
Move Size: 29.4%
Sector: Commodities
Direction: Up
Magnitude: Large
Affected Instruments: Commodities

Reported publicly: www.marketwatch.com