The demand fro commodities as an investment alternative has fallen significantly in 2013. It seems like this will be the worst absolute decline since number shave been tracked and may be the worst in percentage terms as well. Certainly the poor returns have a lot to do with this decline. Money has moved out of the those asset classes which have declined in exchange for increases in equity exposures which have taken on bubble proportions. Global growth and low inflation expectations have also caused a decline in commodity demand; however, this direction can change quickly. Look at the strong gains in 2009 and 2010.
While global growth prospects have been quite wide, private forecasters are thinking there will be stronger growth in 2014 in the G3 as well as OECD countries. This could be the driver of a change in commodity demand.
No comments:
Post a Comment