Commodities beating Bonds and Equities
Written by A Forex View From Afar on Friday, January 04, 2008Back To www.TheLFB.com
Commodity markets enjoyed an extraordinary start to 2008 with prices for gold, platinum, crude oil, heating oil, gasoline, palm oil, rapeseed and rice all reaching record levels this week, helped by new investment flows at the start of the new year.
Commodities comfortably outperformed global equities and bonds last year and pensions funds and asset managers are expected to increase their allocations to the asset class in 2008.
Market talk suggested that between $1bn and $5bn of new investment money could flow into commodities at the beginning of the new year.
Oil breached the key $100 level, setting a record of $100.09 a barrel on Thursday, stealing the spotlight from gold, which surged beyond its previous record of $850 set in January 1980.
Falling inventories, strong demand from emerging markets, disappointing supply growth from non-Opec countries and speculative money flows have all been blamed as factors for record oil prices.
