Shenzhen, China – August 28, 2018 – The rise in commodity prices of late signify a positive trend for the economy. Of special note are the oil prices that have just risen by 2%, and over the last one year, by over 50%. For some experts, commodity bullishness is however not a good sign if the current economic cycle is concerned.
Among the commodities, metals, copper and aluminum have shown great strength over the years, with the last two rising by 30% in the last two years. This means that there is vitality in the industries, and the recession blues are past, with demand expected to return.
Overall, the US economy is on an upward swing, with unemployment rates low, the rise in stocks post the Fed meet, and a stable economic growth this year. Inflation, which is a worry for most investors, is just below 3%, and thus needs a careful watch. The Fed target for inflation stands at 2%.
“Though commodities such as metals have shown a strong performance, it will be wise to not consider it a final verdict on the future performance of the economy. Inflation figures and other factors too require a careful consideration,” said a spokesperson for Avic Management.
Investors should therefore look beyond the strong commodities like metals, and keep an eye on inflation figures in the coming cycles.
Avic Management is the trusted source for advice and insight into investments, latest market trends and challenges. The firm adheres to strict regulatory and financial standards so that clients can trade with confidence on global markets. Avic Management is a Registered Member of DCE Dalian Commodity Exchange.
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