Commodities to tempt investors
Risk-wary traders pummelled commodities including oil and industrial metals in the first half of this year, but gold shone, helping to build a strong case for selective investment over the next six months.
Together with silver and platinum group metals, gold was among the top performers among global commodities, rising more than 13 per cent in the six months to the end of June.
It is well-placed for further gains as the reasons for its strength so far — a hedge against mounting European debt, sluggish economic recovery and anticipation the US dollar will lose strength — remain intact.
In contrast, on the biggest commodity market, US crude futures fell nearly five per cent and the outlook is cautious. A Reuters poll in June showed a lower consensus monthly forecast for the second time in a row after a year of bullish numbers. Gold traders, increasingly view the metal as a capital protection vehicle, are targeting psychological levels above the June record high of $1,264.90 .
“Both gold and silver are likely to remain strong and strengthen further in the second half. There is no question that they are behaving this way because of the debt crisis and because of the lack of confidence in paper currency,” said Mr Alex Allen of Eddington Capital Management. — Reuters
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