In recent weeks, the debate has been unleashed on the possibility that current commodity prices are inflated by a bubble ready to burst. There was no shortage of technical explosion tests, but for the time being they were followed by immediate recoveries, thus leaving prices at the mercy of ever greater volatility and with frenetic changes ahead.
The only certain mini-explosion is the one that affected silver: after having touched 50 dollars an ounce at the end of April, today it is struggling to hold the 35 dollars level. That's still at least $4 more than it took to buy silver at the end of 2010. Gold has fallen from its all-time high of $1575,79 per ounce, set on May 2, but appears solidly anchored at $1500. , a level never seen in London until a month ago. The sales reported by George Soros' fund and which took place in the first quarter of the year obviously did not create the same fears that their announcement, well orchestrated by the financier last week, aroused. For the metal, at the center of the Vicenza Oro event these days, perhaps a progressive descent towards the values of the end of December is looming, when it fluctuated just above 1400 dollars. However, Greece's difficulties and its consequences on the currency markets call for caution. The rally that brought gold higher has reasons that still appear to be very present. The difficulties of the economy certainly do not suggest abandoning a safe haven asset (someone even prefers to call it "the true world currency"). Rather, it should be remembered that the Chinese demand for jewelery is growing continuously. Chinese consumers and central banks promise to easily absorb even the gold that becomes available for the sale of some gold ETFs. Certainly, however, solid global economic growth and greater stability in the currency markets will kick off a downward movement that could do a lot of harm to the all-out supporters of the yellow metal.
The case of oil is more important for the political and economic implications and appears more conspicuous for the progressive widening of the gap between quotations and the real market. The week that has just begun saw a sharp drop in prices in the early hours of trading, in line with the recovery of the dollar. In less than a month, prices have lost more than 15 dollars, but are still at levels that last week the International Energy Agency considered alarming for the growth of the world economy. The recent decline offers oxygen to refiners, but does not change, at least for now, a panorama made up of a modest demand for refined products. Goldman Sachs' analyzes continue to guide futures even without links to reality. As some independent operators point out, in April the largest Saudi offer (to compensate for the objective shortage of Libyan crude oil and the difficulties in obtaining Syrian oil) did not find an equally large demand. And the exceptions to the bans on buying Iranian crude oil (the tightening of EU measures towards Tehran is today) have accentuated the feeling of a well-supplied market. The quotations of Brent, always kept much higher than those of the WTI (the US reference is surpassed even by Dubai crude) favor the arrival, in a Europe that buys little, of South American oil which finds here theoretical prices unthinkable in America. Little is expected from OPEC, which will hold its periodic meeting in Vienna on 8 June: production quotas have been at a standstill since the end of 2008, but it is only prices, not demand, that demand an increase in supply from the of the cartel. In Vienna, therefore, it will be more interesting to verify the presence and statements of the Iranian (will it be President Ahmadinejad?) and Libyan (will it be Minister Sokri Ghanem, who seems to have abandoned the pro-Gaddafi front?) delegates.
Elsewhere, there are hints of pessimism regarding the prices of non-ferrous metals, both due to the extent of aluminum stocks and due to the recurring rumors of a slowdown in copper purchases. But it is a cautious pessimism, which does not speak of a bubble ready to burst. So much so that Macquarie's analyzes suggest that from the autumn Chinese demand will once again begin to strengthen and lay down the law. The coffee sector is also difficult to read: in New York the price of the Arabica variety closed last week below 260 cents per pound for the first time in almost eight weeks, but remains well above the 240,5 cents at the beginning of the year. The market is well supplied and not even the season of low harvests in Brazil (where production has a two-year cycle) is such as to worry, indeed, it appears to be close in quantity to the levels of a year of high harvests. A gradual decline can be expected in the coming months, but not a collapse. Conversely, volatility will remain high, which however has reasons unrelated to the fundamentals of the market (ie production, inventories and consumption). Attention looks further ahead: in the future, the gradual growth in real demand will require the search for new areas to be used for this crop. The repeated adjustments in the prices of gold, oil, industrial metals and coffee do not erase the feeling that the markets are at the mercy of maneuvers dictated by exogenous factors, such as the utterances of the gurus or the analyzes of the large investment banks. Quotations, although declining, still speak of inadequate levels to favor the recovery of the world economy. In fact, real demand, especially that of oil, still shows little vivacity. Those who expect a bubble to burst, however, risk being disappointed. And those who have seen the signs in recent weeks must remember that globally prices are still higher than at the end of 2010.
