The outlook for commodities markets remains positive, as a weaker dollar, global stimulus and infrastructure spending helped boost commodity returns in July, says Credit Suisse.

The Swiss bank’s commodity experts believe that commodities markets might continue to fluctuate over the near term, however, their outlook remains positive on attractive valuations and inflation hedging benefits.

“Despite some mild market trepidation in the beginning of last month, commodity markets continued their upward trend, ending July on a positive note,” said Andrew Karsh, co-lead portfolio manager for the Credit Suisse Total Commodity Return Strategy.

“While macro signals remain mixed in terms of a global economic recovery, our outlook for commodity markets continues to be positive as we compare recent prices to historical highs,” he said.

Co-lead portfolio manager, Christopher Burton, said: “A weaker dollar, increased global money supply from stimulus packages, and an emphasis on infrastructure spending have boosted commodity returns with specific momentum in the industrial metals sector.”

“We believe that the direction of the markets may continue to be uncertain in the near term, but we remain confident in the inflation hedging benefits of commodities, and therefore continue to believe current prices offer a good entry point into the asset class,” said Mr Burton.

The Dow Jones-UBS Commodity Index Total Return gained 3.23 per cent in July, mostly due to momentum in industrial metals, bringing the year-to-date performance to 8.00 per cent, Credit Suisse said.