Metals commodities likely to be hot and volatile for some time
Programs to stimulate the economy are likely to keep commodity prices strong in the short to medium term and net longs have been increasing for the past four weeks as funds increased their bullish bets.
Posted: Tuesday , 13 Sep 2011Funds increased bullish bets on raw materials for a fourth straight week, the longest series of gains this year, on speculation that economic-stimulus programmes will lift demand for metals, grains and energy.
In the week ended September 6, speculators raised their net-long positions in 18 commodities by 0.2% to 1.28 million futures and options contracts, government data compiled by Bloomberg show. That's the highest level since June 14. Funds became bullish on copper for the first time in three weeks, and wagers on a gold rally increased for the first time since early August.
Last week, Federal Reserve chairman Ben S Bernanke said policy makers this month will discuss tools they may use to help the recovery, and president Barack Obama proposed a $447-billion plan to spur job growth. The Standard & Poor's GSCI Index of 24 commodities has surged 22% in the past year as the Fed kept US borrowing costs near zero percent and bought Treasuries in a bid to stimulate growth.
"The printing presses of various governments running overtime is likely to keep the commodity markets hot and volatile for quite some time," Philip Gotthelf, the president of Equidex Brokerage Group in Closter, New Jersey, said ....
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