Title: Jim Wiederhold: Institutions Want Commodities Again, 3 Reasons Why Show: Investing News Network (host Charlotte McLeod, investingnews.com) Guest: Jim Wiederhold — Commodity Indices Product Manager, Bloomberg (runs BCOM, the Bloomberg Commodity Index, and BERY, the Bloomberg Enhanced Roll Yield Index; ex-S&P Dow Jones Indices commodities strategist) Date: 2026-06-24 (published) URL: https://youtu.be/yYPU6vXw5zQ Length: 20:40 Note: YouTube auto-captions. Fillers (um/uh/"you know"/stutters/false starts) removed; wording otherwise verbatim — no paraphrase, no reordering, no added words. Auto-caption garbles mapped and corrected in the body where the spelling is unambiguous: "Weiderhold"/"Weirhold" = Wiederhold; "BARRY"/"Barry" = BERY (the Bloomberg Enhanced Roll Yield Index — an acronym, not a person's name); "sediment" = sentiment. NOTE: BCOM and BERY are Bloomberg INDICES Wiederhold manages, not tradeable tickers — never treat them as securities. No individual securities are named or rated in this conversation; it is a pure macro / commodity-index discussion.
00:05 I'm Charlotte McLeod with InvestingNews.com and here today with me is Jim Wiederhold, Commodity Indices Product Manager at Bloomberg. Thank you so much for being here today. Great to have you. >> Hi Charlotte, thanks for having me. >> Really good to have you back. We're catching up on our last conversation all the way back in January.
00:24 So things are looking a little bit different right now. I know that the Bloomberg team has been doing some research looking at trends in the broader commodity space including growing interest from institutional investors. So I wonder if you can pull out any key findings that you think investors should know about. >> So I think I've spoken about this before but the two main reasons why institutional investors look to commodities within their portfolio are for the diversification benefits and the inflation hedging.
00:53 But what we've seen also this year is a third theme is resource security which goes back to the last year as well where we're seeing countries, governments making sure that they have enough resources, their critical materials within their borders and so that's really playing out here. We've seen the supply disruptions but we have seen the move back to the asset class because of the uncorrelated nature compared to other major asset classes.
01:23 So it's a diversifier and also the inflation hedging benefits that you get from commodities allocation over time. This decade, the 2020s, we've already experienced inflation shocks a few years ago, geopolitical disruptions and increasing concern about finding those critical resources for every company and government.
01:48 >> Yes, I was going to ask you what was driving that interest from institutional investors. I think we can see that the Iran war is playing a role, that supply chain focus that we're seeing from countries all around the world. I'm wondering, are there any particular commodities in that light that are seeing particular attention? >> Well, clearly in the energy space, there's been a lot of attention.
02:12 And actually, interesting if you look at ETF flows, there was a lot of allocation of commodities right before the spike. So a lot of these market participants that re-engaged in the asset class got in at a great time. And as soon as the Iran-US war started, the prices of every petroleum-based product basically doubled.
02:37 Some of them even more. And we've seen things cool off as tensions seem to be cooling off, but still very elevated. We had one of the biggest rises in the BCOM energy index in over a 6-month period. And so energy is clearly the forefront of people's minds right now. I would say the other one that is very interesting right now is copper.
03:03 And I was just looking on the Bloomberg terminal, the positioning with the CFTC report on the managed futures. And we're at almost near record net longs there, at least in the last 5 years. So people are positioned and that's because of the fundamental reasons why you want to have copper exposure. It's for the energy transition, our move from a fossil fuel economy to an electric based economy, global economy.
03:35 So you need key metals, industrial metals, and copper is one of the most important in that time frame. And then on the flip side, the miners have had several years of underinvestment in their capacity and sometimes it takes up to a decade for a new mine to be started from discovery to actually working and producing metal.
04:04 So there's a limit to the amount of supply while we're still seeing okay global economic growth readings. So demand's picking up potentially more in the future if you believe we're going to continue on this energy transition path and supply could be limited so people have gotten positioned on that front.
04:24 >> Great takeaways there and I think we can dig into the energy and the copper a little bit more. Starting with energy, there's so much uncertainty right now so I know it's tough to say anything there. It does seem like maybe we're seeing tensions dissipate in the Middle East but what investors I think are wondering at the moment is all right, even if that dissipates, it will take some time for prices, the situation to go back to normal.
04:51 So maybe we could be in a time when we keep seeing that continued emphasis on energy. Any thoughts on what we can say at this moment right now? >> Yeah, so we had a huge disruption since we spoke last in global oil supply. We immediately had 20% of oil exports shut off. That's been coming back somewhat recently but we've had disruptions to oil infrastructure which may take a little while to get back online and then the interesting thing of why oil prices may not have moved up into the 200 dollar range is
05:33 because you had China at the same time. They've pulled back on some of their levers of economic growth at a key time so their demand came off which helped. Prices are very elevated, but it could have been worse potentially. And then the US continued to be the largest producer of oil in the world and continued to increase production during this time.
06:00 So there's been some competing forces and now we're seeing a little bit of a softening in the oil price. We'll see what happens over the next few months, but yeah, it's hard to forecast when there's a lot of moving pieces at the moment on the energy front. >> Absolutely.
06:18 And looking at copper, you mentioned the connection to the broader economy. And maybe that's a chance for us to take a look at what is going on there. You talked back in January about the potential for stagflation in the US and I think definitely since then we've got the inflation side of that ramping up.
06:36 So what can you say about the broader outlook for the US economy, where we could be headed as the next half of 2026 begins? >> Yeah, I think there's been a lot of uncertainty with businesses on the US side, maybe now there's finally a willingness to use capex, but because of the uncertain geopolitical environment, the tariff announcements, there was just uncertainty from a business planning perspective, which led to possibly a softening in global growth, but as soon as we get clarity on
07:11 things, then that could lead to a ramp up in economic growth. So it could go either way here on the growth front. And there was a call for stagflation because we saw similar patterns in other macroeconomic regimes historically, but economic data has mostly held up.
07:33 Unemployment has picked up a little bit. Inflation has ticked up, but on a headline basis. So we had some of the highest headline inflation readings in the last 3 years, but core inflation, which the Fed is concerned with, has stayed relatively muted.
07:50 So that's been anchored for now. And there's a new Fed in place. So there's uncertainty of the path of rate moves from here. But if we move past some of these geopolitical news headlines, which always tend to lead to higher commodity prices, that could lead to a little more investment impetus in market participants.
08:22 >> The other point I want to bring up from the beginning of the year is we had talked then about a potential shift in 2026 from precious metals and then toward more interest in industrial metals. So maybe we can see that happening as you're talking about with copper. But to what extent are we seeing that play out overall? I wonder maybe we can also talk about what's going on with gold and silver.
08:45 People are looking at the big run up at the beginning of the year. Now we seem to be in a bit of a holding pattern, but people are wondering is this them consolidating before the next move higher or are we going to start trending further downward? So any thoughts on that note? >> Yeah, I think that was one of my key themes potentially for 2026, where I thought industrial metals would outperform precious after precious metals had a very stellar run, particularly gold over the last 2 and 1/2 years and the rest of the precious metals complex rose
09:17 higher last year with impetus with silver, platinum, palladium all screaming higher. And then we saw a peak in January with the gold, silver, and then a pretty big drawdown after that happened. So clear profit taking. And historically, whenever gold makes these runs over 2 and 1/2, 3-year periods, there tends to be a pretty decent period of consolidation, sometimes over years.
09:50 So we could potentially see a little back and forth in a range over the short term. What was driving it most recently over the last few months is the strength in the US dollar. So whenever the US dollar strengthens, that tends to be a headwind for gold prices, and you're seeing that play out.
10:10 So uncertain where precious metals will go from here, but clearly they're being affected by the dollar most recently. And then there's been some pullbacks in investment after the big moves higher. But the World Gold Council just came out with their surveys from central banks, and they had the biggest percentage reading in the last years of expectations that they're going to allocate more to gold.
10:38 They're going to buy more gold bullion. So that tends to be a precursor to another rise in gold prices. I'm uncertain if that's going to happen in the next year or 3 or 5 years, but that's a good indicator, good leading indicator. It's just uncertain how much time spans before it actually moves.
10:58 Because there's a lot of things that affect the price of gold. And then on the industrial metals side, if you look at the BCOM sectors, BCOM industrial metals, they're up about 10% as of this video here. So, and then precious metals, BCOM precious metals are actually down on the year.
11:17 So for now, that call is working, but we're halfway through the year, and we have 6 months left. So it's an uncertain path forward, but at least the industrial metals, they have those supply constraints, and they have the underlying fundamental story that people are looking at.
11:35 >> Right. And on the industrial side, any other standouts? I think we've done a good job talking about copper. Any other metals that investors should pay attention to at the moment? >> Well, people have definitely paid attention to aluminum because that was disrupted also with the tensions in the Middle East currently.
11:57 But other smaller metals like tin are up pretty nicely this year. It's a much smaller market and tends to be a smaller piece of broad commodities benchmarks. It's not in the BCOM, the Bloomberg Commodity Index, but it's in our Bloomberg Enhanced Roll Yield Index, which has a slightly wider universe and that has slightly helped with the outperformance of BERY, which is what we call it, versus BCOM, particularly this quarter. So,
12:29 yeah, some of these — silver is interesting because it had that big move higher and now gold and silver are down about the same amount in single-digit percentages year-to-date in price, but silver is 60% industrial in nature.
12:52 So sometimes it moves with gold, sometimes industrial metals are part of the reason for the move. But that one, it had an exponential move higher in price over that two-month period. And when that happens, there always tends to be a pretty long consolidation period after that.
13:14 So yeah, it'll be interesting to see what silver does because it's a much smaller market than gold and I think gold could potentially lead the way if we're in a continued uncertain environment and people are looking for that store of value, that safe haven. But it was interesting how gold kind of moved after the spike with risk assets.
13:41 It tends to be completely uncorrelated, but over the last few months it was kind of trading as you see people invest more in equities and then kind of build up back their portfolio as they start to get — they at least feel more certain about the path forward with some of these geopolitical issues that we have this year.
14:01 >> Great takeaways there as well. And if we take a step back and look again at the broader commodity space, I think as a whole they've been out of favor for some time. And I wonder if you see us entering an era, a time period when they could as a group become more at the forefront, in favor for investors.
14:21 And is there a period of time that you would compare us to in the past that is like right now? >> It's very similar to what happened in the 1970s with which was another oil shock that we experienced. So cut off of supply and you see a spike, prices spike and at the same time, gold prices rose higher as well.
14:46 And just across the entire commodity landscape. Because energy historically has always been an input to other production of other commodities. So you always need power in order to grow any of the grains, dig for any metals. So energy tends to lead the way because it increases the cost of doing business on the commodity producer front.
15:15 So yeah, that's a period in the 1970s that's kind of similar, a little bit like the 2000s. Some people say we're in a commodity super cycle, but different drivers back then and a clear different macroeconomic regime where back in the 2000s, globalization was happening at pace and then now we're in a period of deglobalization.
15:39 So commodity prices are moving higher because of that because people aren't looking at the low-cost provider globally. They're looking at the strategic provider close to home. So they're potentially paying more and that increases the cost of the commodities. So some interesting periods where things are kind of happening in a similar fashion on a sector basis, some are leading, some are lagging, but yeah, I think 1970s, but a little more recent would be the 2000s
16:11 except we have some major themes that are quite different. >> The other point I wanted to ask you about. So you're speaking about the growing institutional interest in commodities. I wonder if you see it filtering down yet or in the future to retail investors. I feel like there's so much focus right now on AI and that kind of thing among retail investors.
16:32 So I'm wondering, do you see that changing? >> Yeah, institutional investors, they tend to look at portfolio construction. So there's been a clear move back to the asset class on the strategic asset allocation basis, less tactical. And people have moved back within the last year to 2 years on that front.
16:55 And some of them tactically added to their position right at the start of the year. And then whenever something moves, they tend to take profit on a piece of that allocation. And then on the retail front, they look more on a theme story basis. So just like you said, it's AI power demand, AI infrastructure, which is needed a lot of metals, the energy transition like we talked about, the nearshoring, the critical metal story. That's
17:28 another one. Climate change with the increasing weather temperatures that we're seeing, which leads to more cases of extreme weather, which could argue for exposure to a global grains basket. So I think retail looks more at the themes and stories and if you take ETF inflows as a proxy, there's been clear move in inflows into the commodity ETF space over the last 6 to 9 months in particular.
18:03 And yeah, I think there was probably a 5-year high in commodity ETF assets in the first quarter of this year and part of that was price related, but was also a lot of inflows since the 2010s when we didn't necessarily have as much interest in the asset class.
18:26 That's clearly changed on its head over the last 5-6 months, basically this decade. So yeah, the total return of BCOM is still over 11% annualized over the last 5 years and people are starting to chase those returns as well as you do when you see the 1, 3, 5-year performance actually look positive compared to negative, that's something that people pay attention to.
18:56 >> Yes, that makes total sense. So thank you for going into that. I will let you go unless you had any final thoughts that you would want to leave investors with. I think at the beginning of the year, like you mentioned, you gave us that precious to industrial trend that seems to be working out pretty well.
19:12 So anything you would leave us with? >> I would just say that commodities have definitely reemerged as a strategic asset allocation. The industrial metals story has strengthened. Gold has come off, but it still refuses to step aside from the conversation. And the supply security is the big new investment theme over the last year and a half that's only strengthened with what we've seen so far in 2026.
19:41 >> All right. Well, we'll wrap it up there. Hope to have you back in the future to review how things are going, but thank you very much. This was great. >> Thanks so much. Yeah, enjoyed it. >> Of course. And once again, I'm Charlotte McLeod with investingnews.com, and this is Jim Wiederhold with Bloomberg. Okay.
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