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Have years of increasing interest rates stopped inflation?

*Financial Times, by Kevin Morrison, April 10, 2006

Commodity prices continue upward charge

“The five-year commodity price boom that has catapulted metal, energy and some agricultural prices to record highs continued on Monday and is set to extend further, according to investors, mining groups and sector analysts.

Commodities – from copper and zinc to orange juice and refined sugar – reached fresh nominal highs last week. But, instead of signalling a top of the market, hedge funds and some mining executives believe prices have further to rise because they remain far from their highs in real price terms.

On Monday, commodities extended their record breaking run with gold reaching a 25 year high of $598 a troy ounce, silver touching a 23 year high of $12.50, copper and zinc hitting new highs of $5,930 and $2,917.5 a tonne respectively, and Brent crude futures 61 cents higher at $67.90 a barrel and within $1 of their record high.

The upward spiral is being fuelled by global economic growth, tight supply and rising inflows of investment, compounded by conservative planning prices among mining companies which have held back mining investment, say analysts and hedge fund managers.”

“Commodity prices are also drawing attention from European pension funds seeking to diversify away from equities and bonds. The move signals longer-term investor interest in the sector. As a result, some in the commodities industry believe prices are set for an upward re-rating.”


*This information is solely a highlight of the opinion of a third-party publication and is incomplete.  Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

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