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Commodities Outperformed Most Asset Classes in 2010
And the Story for Commodities Remains Compelling
Demand remains strong.
QE and low interest rates continue to encourage investors into real
assets.
The weak dollar is supportive.
Continued uncertainty is likely to continue to provide support for
gold.
Tight commodity markets will react significantly to any further
supply disruptions (tail risk).
Determinants of Commodity Demand
When thinking about demand for many commodities, there are two
main components.
Global Industrial Production provides a good proxy for demand for
commodities used to make goods.
Global Fixed Asset Investment is a good proxy for demand for
commodities used in the construction process.
In addition the impact on price is a function of both the level of
demand and the rate of change.
Visit http://indiaer.blogspot.com/ for complete details �� ��
Commodities Outperformed Most Asset Classes in 2010
And the Story for Commodities Remains Compelling
Demand remains strong.
QE and low interest rates continue to encourage investors into real
assets.
The weak dollar is supportive.
Continued uncertainty is likely to continue to provide support for
gold.
Tight commodity markets will react significantly to any further
supply disruptions (tail risk).
Determinants of Commodity Demand
When thinking about demand for many commodities, there are two
main components.
Global Industrial Production provides a good proxy for demand for
commodities used to make goods.
Global Fixed Asset Investment is a good proxy for demand for
commodities used in the construction process.
In addition the impact on price is a function of both the level of
demand and the rate of change.
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