The behaviour of Crude, Gold and Silver as of late would have the casual observer believe that the whole commodity “story” is under serious threat. However, beneath the scenes nothing could be further from the “truth”.
Real commodity prices, that is spot prices or those for immediate delivery, are only a fractional percentage from their multi-week highs and the inflation premium between TIP 10yrs and non inflationary protected 10yrs is more or less where it was just one month ago. Either which way there certainly has not been enough of a change in spot commodities or inflation premiums to suggest that a “fundamental” change has taken place in the commodity story. Until proven otherwise commodities are still in a bull trend.
Therefore it would appear that the fall in commodity “heavy weights” such as oil, crude, and silver are not justified and that the weakness should be seen as a buying opportunity rather than the start of a material move to the downside.
