Tight global supplies in the face of rising demand will continue to push up uranium and zinc prices, while gold will benefit from its role in 'asset diversification' and as a hedge against 'general economic uncertainty', according to a recent CNW Group article.
Scotiabank's Commodity Price Index, which measures price trends in 32 of Canada's major exports, eased back in November by 1.1%, after reaching a new record high in October. While metals & minerals continued to spurt ahead, the Oil and Gas Index lost ground. . . .
"2005 has turned out to be an exceptional one for commodity prices, with Scotiabank's Commodity Price Index posting the third biggest annual gain in its history, with data starting in 1972," says Patricia Mohr, Vice-President and commodities specialist, Scotia Economics. "Only two years have surpassed recent strength -- 1973 at the time of the Arab oil embargo -- and 1979 -- a time of rapid world economic growth, raw material stockpiling for 'fear of shortages' and accelerating world inflation. This time – rapid industrialization in China and emerging Asia and global under-investment in oil & gas and mining & smelting during the 1990s -- have propelled prices."
In 2006, commodity prices are expected to remain strong. However, after four years of double-digit gains, the outlook is more mixed. Slightly slower global growth, a moderate further tightening of monetary policy in the United States and Euro Zone -- to stem any increase in inflationary expectations -- and the beginning of a supply response to today's lucrative prices may moderate overall resource prices. However, tight global supplies in the face of rising demand will continue to push up uranium and zinc prices, while gold will benefit from its role in 'asset diversification' and as a hedge against 'general economic uncertainty'. Natural gas prices will remain historically high through 2007.
Scotiabank's Commodity Price Index, which measures price trends in 32 of Canada's major exports, eased back in November by 1.1%, after reaching a new record high in October. While metals & minerals continued to spurt ahead, the Oil and Gas Index lost ground. . . .
"2005 has turned out to be an exceptional one for commodity prices, with Scotiabank's Commodity Price Index posting the third biggest annual gain in its history, with data starting in 1972," says Patricia Mohr, Vice-President and commodities specialist, Scotia Economics. "Only two years have surpassed recent strength -- 1973 at the time of the Arab oil embargo -- and 1979 -- a time of rapid world economic growth, raw material stockpiling for 'fear of shortages' and accelerating world inflation. This time – rapid industrialization in China and emerging Asia and global under-investment in oil & gas and mining & smelting during the 1990s -- have propelled prices."
In 2006, commodity prices are expected to remain strong. However, after four years of double-digit gains, the outlook is more mixed. Slightly slower global growth, a moderate further tightening of monetary policy in the United States and Euro Zone -- to stem any increase in inflationary expectations -- and the beginning of a supply response to today's lucrative prices may moderate overall resource prices. However, tight global supplies in the face of rising demand will continue to push up uranium and zinc prices, while gold will benefit from its role in 'asset diversification' and as a hedge against 'general economic uncertainty'. Natural gas prices will remain historically high through 2007.
