Oil has been up over 21 percent since the beginning of the year as geopolitical risk increased the premium in energy markets. Silver, even with the decline in May, has also increased by over 20% based on strong demand as a substitute for gold. Corn continues its upward movement caused by low inventory and poor planting conditions.
On the other hand, sugar has fallen 25 percent with larger crop harvests that should reduce the supply constraints from last year. Cocoa prices have declined with the reduction in political risk and the flow of supply out of the Ivory Coast. Nickel has seen declines as higher production out of China has increased supply.
Commodities are a diverse asset classes and these broad price differences tell us it is hard to think of this asset class as a single group of markets that move together through time. This differences in correlation is one of the strongest reasons for engaging in active management versus passive long-only buying of an index.
There is no such thing as one size fits all in the commodity markets.
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