Weak dollar fuels commodities demand upsurge
The weak US dollar will continue to fuel the higher prices of commodities considered as the next safest forms of investment.
The trade and demand for commodities whether mineral, non-mineral, and agriculture-based are perceived to still increase in the next five years.
Commodities as measured by Thomson Reuters/Jefferies CRB Index have increased 18 percent in the second half bolstered by the demand from China.
Copper has surged 28 percent over the past year, trading at $8,439 a metric ton today, on stronger demand and a weaker U.S. currency. Cotton climbed to a record $1.3920 a pound this week; gold traded an all-time high of $1,387.35 an ounce last month; and New York crude has risen 7.5 percent this year, data from Bloomberg showed.
A related interview by Bloomberg with Standard Chartered Bank's global head of commodities Arun Murthy indicated: "We see opportunities in coal, palm oil, the platinum- group metals and rubber, and iron ore," primarily in derivatives, Murthy said yesterday.
Murthy said that the dollar's weakness, inflationary pressure in the U.S. over the next 12 to 18 months, and stronger emerging-market demand will all "imply that commodities are going to be very bullish."