Commodities uncovered: Are there any investment opportunities worth considering?

Julie Brownlee, Fsp Invest, 27 Jul. 2015

Tags: commodities, commodity, investing in commodities, agricultural commodities, precious metals,



Overall, commodities have had it tough over the past few years.

Since the financial crisis, economies around the world are struggling to pick up pace and this is having a negative impact on demand for commodities.

So which commodities should you look to invest in?

Read on to find out…



Investing in precious metals


Gold and silver as commodities aren’t offering much in the way of investment opportunity at the moment, unless you want to buy and hold for the long run.

Since soaring following the financial crisis, gold is struggling. The strong dollar isn’t help gold or any other commodities for that matter.

But it’s prudent to hold between 5% and 10% of physical gold in your portfolio as insurance.

Gold is a safe haven in times of trouble and it’s also protection against rocketing inflation.

Looking forward, gold should see a rise in demand as emerging market demand grows alongside the growing middle class. There is also a bit of central bank buying going on in a bid to bolster foreign reserves,

Silver on the other hand is for speculators. It does tend to follow the price movements of gold, but it’s extremely volatile due to the small market size.


Investing in raw commodities


Raw materials, such as iron ore, are still ambling along and a recovery may still be well off. China, the top user of these metals, is still showing signs of strain as its economy slows.

Supplies are amply, which is putting further downward pressure on prices.

But there is one sector of commodities that’s shining. That’s soft commodities, such as grains. These agricultural commodities are in a structural bull market, Money Week explains.

This is thanks to the falling supply of arable land due to climate change and growing populations.

If you want to exploit this current trend, look to invest in stocks focusing on fertiliser and farming equipment.

So there you have it. The commodity investment opportunities worth considering.

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