Category Archives: Commodities

India has halted futures trading in certain types of commodities in an effort to combat inflation by reducing speculation. Observers argue this is likely to be ineffective, arguing that the price rise is fundamentally driven. It is true that just about every major economy ex the US and Japan is suffering from inflation (and most […]

Goldman foresees a continue rise in oil prices due to continuing capacity constraints and continued strong demand from emerging economies. From Bloomberg: Crude oil prices may rise to between $150 and $200 a barrel within two years because of a lack of adequate supply growth, Goldman Sachs Group Inc. analysts led by Arjun N. Murti […]

In a bit of synchronicity, food worries are getting prominent billing tonight in the media. The Financial Times” Martin Wolf sketches out some dimensions of snowballing agricultural problems and possible solutions. Wolf’s piece endeavors to cover a lot of ground, which means of necessity it gives short shrift to depth. It touches on the central […]

A good piece in the New York Times today, “Price Volatility Adds to Worry on U.S. Farms,” describes how the runup in agricultural crop prices is making life harder for farmers. The recent upswing, and the entry of speculative capital, has led to a sharp increase in volatility (note that that’s the reverse of what […]

Even though the seeming suddenness of the onset of food inflation and shortages has caught many by surprise, this too was predictable. I recall reading a Barrons Roundtable interview some years ago, perhaps around 2000, when Jim Rogers pointed out that China had set a goal for each person in the country to eat one […]

Reader notice: a bit terse in our own commentary due to (grr) internet outage… A New York Times article, “Odd Crop Prices Defy Economics,” discusses the fact that there have been frequent disparities between cash and futures prices in some agricultural commodities since 2006. While this pattern has never taken place before and experts blame […]

As the goldbugs load up on gold futures, one of the main buyers of physical gold in pulling back. From the Financial Times: As India’s voracious appetite for gold wanes, producers of the precious metal are taking heed. Indian consumers buy about 25 per cent of the world’s gold, the vast majority of which is […]

I’m late to this item, which appeared in the Financial Times on Thursday, but according to Google News, was not reported elsewhere, so I thought it was still worth featuring. The IMF warned that commodities prices include a speculative element as investors are treating it as a new asset class and a safe haven in […]

We had observed that commodities prices looked overbought, historically fell during recessions, and in recent years had been strongly influenced by emerging market demand, which looked vulnerable to a US slowdown. These observations have proven out much sooner than we anticipated. Commodities continued their fall today. From Bloomberg; Gold headed for its biggest weekly drop […]