With the prices of precious as well as base metals spiralling to new highs, a feeling is gaining ground that this can be the beginning of a crest in the commodities cycle.
The evidence is compelling. Copper prices globally are at an all-time high, platinum at 25-year high, gold at 24-year high, silver at 18-year high, zinc at 16-year high, aluminium at 10-year high and tin at a eight-year high.
Interestingly, for about a month, both dollar and gold prices have been rising, though traditionally the two have shared an inverse relationship with one providing a hedging option against the other.
Internationally, the demand for commodity investments is showing no signs of subsiding. "Although commodity investments are still small in relation to the total ... their share has risen from just 1.5 per cent of all issuance in 2004 to just over 2 per cent so far in 2005," said a note by Barclays' Capital, an international brokerage.
Short positions held by speculators in the US commodity markets is more than ever before. This indicates that funds have started increasing their exposure
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