Commodities will undergo another bull run once financial markets fully appreciate the threat of a global rise in inflation, according to Dighton Capital Management, one of the world's leading managed futures fund managers.

The recent pullback in prices was a temporary consolidation and the bull run in commodities will resume once inflation breaks out and gains momentum, offering long-only investors better growth potential than any other asset class, Dighton says.

Alex Moiseev, Principal and Chief Investment Officer, Dighton Capital Management said: "We have not seen the end of the commodity cycle. It will probably be another two or three years before we see the peak in prices. The current consolidation period in commodities could last another two to 18 months. Investors are only beginning to see inflationary pressure and it is not officially recognised by governments. That is still putting the brakes on capital inflows into commodities.

"But quantitative easing has put so much money into the system that people will start spending this year. That, together with growing demand from emerging economies - especially from the burgeoning middle classes - will put pressure on prices, especially of consumer durables. The US government has pulled back from QE3, which shows it is being more responsible as it sees core inflation picking up. But once inflation starts it will take years to get it back under control. Interest rates will rise and Western economies will face stagflation."

Dighton believes that there is little downside left in commodities. An extreme low for oil would be $80/$85 a barrel while gold should find significant support at $1,400 an ounce.

It added that fears over the real value of money resulting from excessive quantitative easing and consistent devaluing of currencies by many countries will drive up prices of precious metals while growing demand from emerging market economies will raise prices of base metals, soft commodities and oil.

The firm said that much of the earnings uplifts in the US over the last year have been driven by inflationary pressures rather than real economic growth and that quantitative easing is merely postponing the emergence of real structural economic problems. The failure of the S&P 500 to consistently breach the 1500/1750 range will lead to an eventual sell-off in US equities in the medium term that will hit stockmarkets around the world, although emerging markets will be quicker to recover than their developed counterparts.

Moiseev, added: "Commodities offer investors the best potential returns and the current consolidation period is a good buying opportunity. Equities in some emerging markets do offer potential but political and corporate governance issues make them risky. Investors should be looking to asset managers who can trade long and short across all the asset classes, and especially those who can effectively exploit the bull run in commodities."