Commodities are set for the best annual performance since 2016, with crude to copper posting annual gains.
The Bloomberg Commodity Spot Index hit the highest since November 2018 as trade tensions ebb, a risk-on mood sweeps markets, and the dollar eases. The gauge was up 11 per cent last year.
Commodities are benefiting from an end-of-year surge as the outlook for this year appears, at least at present, to be more promising than conditions that prevailed for much of last year.
The United States-China "phase one" pact - expected to be formally concluded this month - hinges on the Asian nation increasing purchases of farm goods. In addition, prospects for a deal have helped spur restocking by raw material users, according to OCBC Bank.
"Renewed optimism from the US-China trade deal is driving demand expectations higher," said Mr Howie Lee, an economist at the Singapore-based lender. "Stockpiles are low going into 2020 and, with the expected pick-up in demand, a lot of industry players find themselves short of inventories."
Raw materials have also enjoyed a tailwind from a weaker US currency, with the Bloomberg Dollar Spot Index retreating 1.7 per cent last month and touching the lowest since late June.
After three interest rate cuts last year, the US Federal Reserve is expected to hold monetary policy steady over this year.
Concerns among investors about the possibility of the onset of a US recession - which hurt commodities earlier last year - have eased.
Last month, bond manager Jeffrey Gundlach said the odds of a recession by the end of this year have dropped to 35 per cent. In September, he had predicted 75 per cent.
Conditions in China, the top raw material user, are picking up too. The nation's economic performance improved last month for the first time in eight months, according to earliest available indicators compiled by Bloomberg.
The advance in raw materials has been broad-based. Crude in New York has risen to the highest since September, with prices up 36 per cent last year as the Opec+ (Organisation of the Petroleum Exporting Countries and its allies) group of producers presses on with supply curbs.
In base metals, copper has surged far above US$6,000 a tonne as global stockpiles sink and the macro-economic outlook brightens. Wheat climbed the highest since 2018, and soya beans are set for the biggest monthly advance since 2016.
There have been gains in precious metals too, including traditional haven gold, which climbed last month even as the risk-on mood prevails and equity markets set records. Bullion is set to post its best year since 2010, having gained nearly 19 per cent.