5 Worst-Performing Commodities In 2012
There are three primary determinants of commodity prices: supply, demand and sentiment. In the near term, if supply exceeds consumption, commodity prices tend to fall. Sentiment, or the opinion of traders that either look to hedge commodity prices to try and smooth out production costs or speculate for profit, is another important indicator that is much more difficult to gauge. For the most part, excess supply conditions are driving prices of the below commodities lower. They happen to be the worst performers so far this year, which could be due in good part to negative sentiment because in a number of cases the price is well below what the fundamentals appear to support [for more commodity news and analysis subscribe to our free newsletter].
50 Ways To Invest In Gold
Gold investing has long been a popular option for investors looking to diversify their holdings. The precious metal is actively traded by a number of individuals and institutions, but is also held by a number of other investors as well. It has become a popular safe haven as there seems to be very few safe options left, especially now that the Swiss franc has been pegged to the euro. A gold allocation can also act as a hedging tool in a portfolio, as the metal’s price typically moves inversely when compared to major equity benchmarks, generally offering nice returns when broad markets are slumping [see also The Ultimate Guide To Gold Investing].
Are Gold Miners A Buy?
Gold fever has struck the markets as unstable equities have led to the metal appreciating at a rapid pace. In fact, the price per ounce has shot up roughly 50% in the trailing year as a number of factors have converged to drive the price skyward. As the metal has rapidly approached the $2,000 per ounce level, investors have begun to speculate whether or not it is overvalued. There are compelling arguments for either side, but the truth is, gold is a difficult asset to value; it produces no cash flow, pays out no dividends, and has no underlying financials to sort through to determine what its true value is. One analyst goes as far to say that trying to value the metal is like “trying to solve a Rubik’s cube while you are blindfolded” [see also Three Ways To Play $2,000 Gold].
