Commodity Price Movement Secrets Revealed

in Demand

It is really common with commodities and commodity prices to be confused about what it is that causes them to fluctuate up and down. When I tell you here you'll kick yourself, as it's really not too hard to figure out when you see it.

The first thing to understand is most the big swings in commodity prices are based upon short-term market timers who attempt to make some big money in quick movements.

That's a fools game, but they do play it. That really has no basis in what the foundation of commodity price movements are, but it does help you understand why it happens.

On the other hand, long term price movements in commodities are based on one thing, and that's supply and demand. It's really that simple. The exception to the rule is when hard economic times come and investors use gold, and sometimes silver, as an inflation hedge.

Our job then is to do the needed research to discover trends in relationship to consumer or business demand, which we can than make the best decision on whether commodity prices will move up or down.

A good example is the agricultural demand that is increasing in China and India. Because of their growing middle classes, they now have the means and demand to appropriate more food, and more variety of food. This will have a major impact on supply and demand for years into the future, and consequently on food prices.

There are many of these types of data and information we can gather to discover the trends we need to know in order to profitably invest in commodities.

So commodities prices, like everything else, is determined for the most part by nothing other than old supply and demand. The trick is getting the most accurate information we can so we know without a doubt where supply and demand is trending.

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Taylor Raimee has 1 articles online

Commodity Prices

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Commodity Price Movement Secrets Revealed

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This article was published on 2010/04/02