As Gold/Precious Metals Correct, Agriculture Commodities Stay Strong
12/03/2010 0 comments
Commodities as a separate asset class is a diversifier in a portfolio's asset allocation. This is especially true for a tactical asset allocation strategy. Among commodities, one can further monitor their sub categories to gauge their trends. We maintain a table of ETFs that represent commodities in our 360 Degree Market View.
Last week, along with other assets such as stocks and real estates, precious and industrial metals had a correction. On the other hand, oil and broad energy market rose from their recent lows.
Gold and silver, with a steep correction last week, continue their strong upward trends. Investment thesis behind gold and silver remains intact: eventually, stimulus (or so called quantitative easing) by governments around the globe will lead to higher inflation. With determined governments to inflate our way out of the economic hardship, even if we experience a short term deflation, people will continue to shun away from fiat currencies.
It is also noticeable that with world food prices continuing to climb, agricultural commodities largely stabilized last week.
Natural gas prices continued to drop, even though we are approaching to one of its seasonally strong periods: cold winter. United States Natural Gas (UNG) had a year to date return of -42.66%, a very dismal picture.
| Assets Class | Symbols | 11/26 Trend Score | 11/19 Trend Score | Direction |
|---|---|---|---|---|
| Silver | SLV | 27.21% | 35.14% | v |
| Precious Metals | DBP | 10.98% | 13.24% | v |
| Agriculture | DBA | 8.48% | 8.69% | v |
| Gold | GLD | 7.74% | 8.55% | v |
| Commodity | DBC | 6.68% | 4.82% | ^ |
| Base Metals | DBB | 3.17% | 3.8% | v |
| Energy | DBE | 2.61% | 1.68% | ^ |
| US Oil | USO | 2.13% | 0.24% | ^ |
| Natural Gas | UNG | -10.67% | -9.1% | v |
(Click to enlarge)
labels:investment,
Symbols:DBA,DBB,DBC,DBE,DBP,GLD,SLV,UNG,USO,
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