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Commodities Briefing - Categorized | Resources, Trends more

Speculation and fundamentals drive resources rally

Posted on 25 November 2016

The extraordinary rally in commodities is being driven both by fundamentals and speculation, but experts are divided as to its sustainability. The last time Fortescue Metals Group shares traded above $6 a share five years ago, iron ore was selling at close to $US120 a tonne, well above the current price of $US75 a tonne. The roaring return for Australian mining stocks has outpaced the recovery of their respective commodities.
Driving investors into the stocks is a heady combination of Chinese fiscal and monetary stimulus supporting demand for steel, optimism that President-elect Donald Trump will push through infrastructure spending quickly, and a return to favour in the value end of the market, in which resources sector sits………………………………….Full Article: Source


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