Cough up for coffee if you’re eyeing commodities

Investing in commodities is something of a high-wire act these days with risks pretty much everywhere you care to look, so it’s no wonder analysts are advising caution. There has been a bear market for the best part of a year now with few signs of things getting any better soon, given that commodities from crude oil to copper to corn face excess supply on the back of falling demand. These markets also have to grapple with the “rapidly rising” cost of storing a physical commodity, says Mr Stefan Graber, commodity strategist at Credit Suisse Private Banking. The CRB index, a major benchmark gauge that tracks commodity prices, has fallen about 30 per cent since its peak in June last year. Crude oil is leading the slump, with prices near six-year lows. That has dampened the investment outlook for commodities as a whole, says Mr Avtar Sandu, senior commodity manager at Phillip Futures. The strengthening United States dollar has not helped either, he adds. Mr Graber says the near-term prospects for commodities are expected to remain “subdued”, yet some analysts see bright spots amid the doom and gloom. Mr Didier Duret, chief investment officer of ABN Amro Private Banking, believes … continue reading

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Source: CTRM Center

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