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Experts: raw markets are attractive, but dangerous
25 September 2007Last tendencies in the world financial markets have led to a sharp rise in prices on raw materials, and those investors, who invested the capital in oil, gold and wheat, have received the significant income from the beginning of this year.
So, only increase of the prices for oil has brought about 40 % of net profit to traders. However, experts call for care and consistency of those, who on a wave of a general agiotage is measured to invest in raw investments.
According to experts’ forecasts, next the tendency of a rise in prices on raw materials will be kept at the same level. So, the president of fund Pacific Heights Management investing in precious metals predicts, that the price for gold will soon break the record in 735 doll./ounce - on a background of the weakening dollar and decrease in a discount rate of US Federal Reserve System. And some experts also expect the further increase of the price for oil, which has already overcome the record mark in 80 doll./barr. Investment banks also share this point of view. So, American bank Goldman Sachs has already doubled the forecasts on profit on raw materials investments.
On this background the market of raw material became unusually attractive to the investors, hoping to gain fast profit. In result, pension and the hedge funds, which are not represented on this market, have started to invest actively in metals and other products.
Recently the rise in prices on raw material has much more exceeded growth of stock quotes and bonds at Wall-Street, which till now tries to be restored after crisis of hypothec crediting. After US FRS has taken all necessary measures to suspend recession of the American economy, the share markets have started to come back to normal activity. In the meantime the prices for raw materials have continued to grow. Besides a financial situation in the USA, industrialization in the growing markets of Brazil, Russia, India and China, by arising difficulties with development of deposits and delivery of the advanced raw material on the market, promote further growth of demand and prices in the raw market.
Analysts warn that investors should be ready for unpredictable consequences. Instability in the raw market creates huge quantity of problems. Even if the trend on increase will be kept, there will be periods, when the prices will decrease approximately on 10 % a month that is not especially pleasant.
- The markets of developing countries continue to involve investors
- Manufacture of biofuel harms agriculture
- Hi-tech sector’s shares have completely returned trust of investors
- “Silent harbor” for investors: oil and gold will rise in price
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