With nearly all the commodity buckets trading at recent lows, who’s going long at this point? I just put in a trade to go long the Dow Jones / UBS commodity index which is a more balanced index than the S&P GSCI Commodity Index, since it put caps on weighting allocations. Anyway, this is more of a long term play for me. I really can’t think of anywhere else to put my money right now. For me, commodities are the best of the mediocre trades. What say you?
I wouldn’t buy the index because I think there are very different long term outlooks for iron ore vs. oil, for example.
I never buy precious metals, but SLV is near a five year low and silver is used in solar panels, which I believe is a continued growth area (albeit largely due to government intervention).
I think if you want to be long commodities, you need to look at the longer-term super cycles. Frankly I think the last one ended in 2008 and will need another 16 years before a new cycle begins. The super-cycle is evident in not only the overall price level of commodities but the glut of supply and low mine utilization.
As a small sample, copper mine utilization was hovering in the mid 70’s% (last time I checked) versus 90% before 2008.