QSmart Limited – on Factors Shaping Commodities Markets

LUXEMBOURG CITY, LUXEMBOURG / ACCESSWIRE / May 13, 2018 / Continued signs of global growth are accruing to create myriad opportunities for investors in one long-dormant asset class: commodities. International brokerage firm QSmart Limited reported that one popular commodities index recently hit a two and a half year high and signs are pointing to the trend continuing.

“Long-term, when you look at the global picture, it sets itself up for a measured supercycle,” said a QSmart Limited lead analyst. “There is a good, compelling story for growth and continued uptake in the end for commodities, especially base metals.” Since an early-February dip, the PowerShares DB Commodity Index Tracking exchange-traded fund is up nine percent and has risen 16 percent over the past 12 months. The CRB Commodity Index has risen similarly and is at a peak not seen since late 2014. There are multiple explanations for the current run, with some pointing to short-term bursts of headlines and others signaling longer-term trends about economic fundamentals. Aluminum prices, for instance, have surged following U.S. sanctions against Russian company Rusal, the second-largest global firm as measured by the output of the metal. At the same time, copper prices have turned around amid hopes that the synchronized global growth theme remains intact, while the market for grains and other agricultural products have also been steady gainers as production has lessened and farmers retool for more demand ahead.

“Prices had been relatively lower over the last three and a half years, mainly because we have dealt with at or near-record production just about everywhere around the globe,” said the QSmart Limited analyst. “That is now reversed, and you’re starting to see things build back up.” Energy, the area that often takes the most focus in commodities, has been on a tear amid record-breaking demand for gasoline to fuel global expansions. The additional sources or excess supply that has kept a lid on prices in years past are no more, and the world’s dominant oil producers are taking the opportunity to drive profits. Gold, another focal point, is pushing higher this year, gaining more than 2.5 percent. A technical strategist at QSmart Limited said a number of chart formations are pointing to further price upside. “The rallies in gold and silver are young while oil and copper have room to trend. Depending on how agriculture performs, commodity markets are on the verge of signaling a secular bull trend.” In addition, commodities generally do well when the Federal Reserve raises interest rates. America’s central bank has already enacted one increase in 2018, and markets are betting on at least two to three more.

Part of JCIM INTERNATIONAL and ARTCORP, QSmart Limited is a market leading provider of Contracts for Differences, stocks, shares, and indices. As a pioneer in online trading with more than 17 years of expertise, the internationally-recognized brokerage firm is based on the training of people with or without prior experience to invest and operate with confidence in an innovative and safe environment while being backed by the best-personalized service in the market.

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SOURCE: Q Smart Limited

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