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Alternative Market Briefing

Analysts agree that commodities are set for a comeback

Tuesday, September 04, 2012

amb
Tony Yarrow
by Beverly Chandler, Opalesque London:

August saw commodities beat equities, bonds and the dollar for a second consecutive month, in what was reported as 'the longest streak in more than a year’. The Standard & Poor’s GSCI Total Return Index of 24 commodities rose 6.4 percent in August, led by silver, with silver futures up 13% over August, cocoa and heating oil. Raw materials rose more than 20% since mid-June, and commodities rose more than 80% from December 2008 to June 2011.

Bloomberg said that investors buy silver both as a hedge against inflation and as a bet on a stronger economy with 53% of silver used in industrial applications from televisions to batteries. The case for a return in strength in the commodities markets was further supported by analysts and fund managers. Tony Yarrow of UK fund manager Wise Investment, reported that the Chinese economy continues to slow down as export demand weakens, and the property boom has ended. "China accounts for nearly half of global demand for industrial commodities (copper, nickel, iron ore etc) and the flagging state of the Chinese property sector is reflected in weaker prices for these metals" he wrote in his latest report.

"Iron Ore, for example, which was predicted by experts to trade between $ 12......................

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