Commodities: Who's Behind the Boom?

[TNHermit]

CHINA, AS EVERYONE KNOWS, IS A BIG FORCE IN THE extraordinary boom in commodities. Its voracious appetite for everything from corn and wheat to copper and oil has helped push up U.S. commodities prices by some 50% over the past 12 months

But China is by no means the whole story. Speculators -- including small investors -- are also playing a huge role. Thanks to the proliferation of mutual funds and exchange-traded funds tied to commodities indexes, speculative buying has gone way beyond anything the domestic commodities markets have ever seen. By one estimate, index funds right now account for 40% of all bullish bets on commodities. The speculative juices are even more plentiful -- nearly 60% of bullish positions -- if you count the bets placed by traditional commodity "pools."

Index funds with buy-only strategies have had outsized influences on the market.

Here's the problem: The speculators' bullishness may be way overdone, in the process lifting prices far above fair value. If the speculators were to follow the commercial players -- the farmers, the food processors, the energy producers and others who trade daily in the physical commodities -- they'd be heading for the exits. For right now, the commercial players are betting on price declines more heavily than ever before, says independent analyst Steve Briese.

For example, in the 17 commodities that make up the Continuous Commodity Index, net short positions by the commercials have been running more than 30% higher than their previous net-short record, in March 2004.

http://online.barrons.com/article/SB...me_top&page=sp

[Aintlifegrand]

i think speculators and dollar parkers are the main thrust of commodity increases as well as demand has and will continue to increase..but mainly speculation is what is going on IMO

[TNHermit]

I see that commodities tanked today. This is interesting to watch. Oil was down to 101 and gas was up. Now there saying were gonna have plenty of wheat. I think these guys are lying and chasing their own tails and don't know it. Its turned into a contest of one trying to BS another in order to get himself out of a jam

[KCM]

Watch the daily trends.
Study them ...very closely.
Watch them rise and fall.
Plot several consecutive days on a graph.
then overlap the graphs together and look at the patterns.


A couple weeks ago, within one 24-hour period, the price of silver bottomed out at $17.21 EXACTLY on 5 separate occasions. Somebody with a lot of money obviously had orders not to let it fall below $17.21!

And within several consecutive days in March, the daily graphs all increased at the same specific times throughout the day, and also decreased at other similar times throughout the day.

Study the charts! Watch the trends.
Clearly, somebody is manipulating the market at least 65% of the time.

The billionaires can force the silver price up to $30 an ounce overnight if they wanted to, or make it fall to under $12 overnight if they wanted to.

Its whatever they want it to be. They are maximizing THEIR profits at our expense!

[Aintlifegrand]

There is a tremendous amount of short coverings as usual with a bear market. people sell metals when they need to cover... then the dollar goes down a bit and people move their investments from dollars to gld and slv....oil went down due to the forecasts that came out today that demand will lessen due to recession in US...

I did notice the 17.21 of silver..very interesting...

It seems every little bit of perceived good news makes nervous gold holders dump and every bit of badnews makes them buy again..they really aren't thinking through this trading it would seem..just jumping in and out...probabally because many are new PM holders.

[NoClue]

Obviously they've stopped playing silver because it's well below $17.21 now.

Commodities - including gold and silver - have boom and bust cycles just like everything else. This is one of the reasons they're no longer used as money.