Commodity volatility has fallen off a cliff and is now at 10 year lows based on 100-day moving averages. The 200-day moving averages are also close to the lows reached in 2003. There was no volatility increases from the fiscal cliff. There was no increase from the EU sovereign events of 2012. We are at 1/3rd the volatility in late 2008 and early 2009.
Even with the shortages in agriculture from the drought the overall index has been on continued down-trend. Agriculture volatility has stabilized at a higher level than found in the 2003-07 period. Energy volatility has continued to stay low for the last 30 months. Precious metals volatility has declined through the year and is below the 10-year averages. The same trend applies to industrial metals. The world has been a calm place for commodities and it is not clear what will change this trend.
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