The end of China's expansion, the strengthening of the dollar and the rise in interest rates can curb demand for raw materials. Investment in these assets is only advisable for aggressive risk profiles
Investing in commodities helps reduce the volatility of investments and can help increase the profitability of portfolios. As we are not facing the end of the economic cycle, but in its final phases and there is still a long way to go growth of the global economy, According to experts, so-called commodities tend to behave positively during this period. Precious metals (gold, silver, platinum, copper and palladium are the main ones), energy sector (oil and natural gas), agricultural products (coffee, corn, cotton, soybeans, wheat or rice, among others), as well as farmers have a place among the most qualified investors. The investment in raw materials it is advisable only for aggressive risk profiles since it is a market with a very high volatility.
According to the manager of MoraBanc Asset Management Tomás García-Purriños, «Gold is the most attractive refuge» and it usually has positive returns at 12 months seen in real rate environments below 2%. And it highlights that in 66.7% of the years that the stock market falls (MSCI World) the price of gold increases. However, Cesar Perez Ruiz, global investment director of the Swiss bank Pictet WM, says that "we are facing the end of the commodity cycle promoted by the growth of China, which is in a necessary adjustment towards a new balance between supply and demand." demand". He considers that the fall of the equity market has come to revive interest in gold in October. However, "a strong dollar and the increase in real interest rates in the United States continues to be a drag on the yellow metal », he adds. In similar terms, Self Bank analyst Felipe López-Gálvez argues that "the market observes with concern the impact that the commercial war in China can have and the main concern of this market is the rise of the dollar, which should affect the demand , as well as the cooling of the economy in the global scope ».
Evolution of black gold and agricultural products
Regarding oil and amid sanctions from Iran and the announcements just made by some producing countries, the Brent barrel could be above $ 70 and "it still makes sense to invest in this sector because the price should be placed above the expectation of the current market », explains García-Purriños. «Despite the fear of trade war, OPEC would never allow us to see the price of a barrel below 50 dollars. I would support it via production cuts, "says Felipe López-Gálvez. And on other raw materials, the MoraBanc leader indicates that "they have a path, especially industrial metals."
In the case of agricultural products such as cereals and coffee, the latest data provided by the company Morningstar guarantee that the performance of diversified funds in raw materials, so far this year, achieve gains of 3%, which skyrocket to 11% in the accumulated last three years.
1. GOLD LOSES BRIGHTNESS
Gold has lost brightness in 2018. Since January, its price has fallen by 8%, like silver. Platinum decreases somewhat less.
2. OIL, OVER 70 EUROS
Tensions in the Middle East and the production cut will lead to the price of a Brent barrel to be above 70 euros during 2019.
3. THE MAIZE, STABLE
The price of corn remains stable worldwide after overcoming the food crisis of a decade ago, lowering and slightly raising its average price: about 150 euros per ton.
4. REPUNTAIN OF THE COFFEE
The price of coffee futures has increased in recent years to stand at $ 1.85 per pound.