$GS, $USO $OIL $CU $IRON $SOY
“For almost 10 yrs commodities have been out of focus. Now, as investors look for great reflation play, they are the hot ticket“–Paul Ebeling
Investing gurus are calling for commodity prices to move higher. Goldman Sachs Group (NYSE:GS) is predicting a new commodity Bull market to rival the China-driven boom of the 2000’s and the Crude Oil price spikes of the 1970’s.
We believe that the fundamentals are in place for a new, structural, Bull market to start, it is probable that a many investors will look back on Y 2020 and wonder how they missed the signs of a new commodity Bull market.
Prices have already jumped from their low point in the spring. Copper, iron ore and soybean have risen to their highest marks in more than 6 yrs, spurred by Chinese buying.
The Chinese importers are being joined by global investors, drawn to commodities as a bet on the recovery of the global economy as well as a hedge against the prospect of high inflation.
Commodities are a cyclical assets, rising and falling in synchrony with the global economy. That puts them 1st in line to benefit from the recovery that may well be triggered by virus vaccines.
We are optimistic on commodities overall, as recovering global economic growth and the possibility of higher inflation should be supportive for prices.
The enthusiasm marks a Key reversal for an asset class that has been ignored for yrs.
After Y 2011 the highest profile hedge funds specializing in commodities exited the markets.
But now that trend has reversed.
The hedge fund industry as a whole has seen outflows this year, but hedge funds focused on commodities have managed to raise money. They pulled in more than $4-B in flows through October this yr.
Fund managers seeing growing interest in the vital asset class.
Have a healthy week, Keep the Faith!