What are the 3 main reasons for commodity ETPs hitting an all record high in Q1 of 2012?
According to ETF Securities’ Head of Research and Investment Strategy, Nicholas Brooks, the 3 key drivers for commodity ETPs hitting an all record high in Q1 of 2012 were:
1. The rebound in global growth and risk sentiment.
2. An increasing concern about the implications of a potential military conflict in the Middle East, which has added upward pressure to the oil price.
3. Continued demand for gold ETPs as portfolio diversifiers, hedges against currency debasement and inflation risks in an environment of low real interest rates
With number 3 being the biggest contributor.
He went on to say that “With the Iran situation unlikely to be resolved in the near future and the structural factors supporting gold demand intact, two of the three key drivers of commodity ETP demand appear to remain in place. The key wild cards for the remainder of 2012 are likely to be the sustainability of the US economic recovery and Europe’s ability to contain its sovereign crisis and prevent it from derailing a broader global economic recovery.” Read the complete article here