Oil and metal prices have reached multi-year highs in recent weeks



chart showing inflation-adjusted commodity prices

After several years of decline, commodity prices are bouncing back. Oil has risen above $70 per barrel, and industrial metals such as copper and aluminum have also reached multi-year highs. Although not as broadly commodity-dependent as in the past, emerging markets economies and companies could see a tailwind from these higher prices. Investors should be careful not to think of emerging markets as a homogenous basket that moves in one direction though. Brazilian miners, for example, might benefit more from such a cycle than companies in other industries. The flip side to rapidly rising commodity prices is increased inflationary pressures, a fear that unnerved markets earlier in the year.