Commodities markets could be headed for 3-5 yr down cycle - Wayne McCurrie
Mon, 29 May 2006
The volatility in commodity prices is typical of the market topping out and could signal a downward move in prices, said Wayne McCurrie, chief investment officer at Advantage Asset Management.
"I think this is actually a changing cycle. I think we have now been in a four-year commodity up-cycle. I think we’re going into, I don’t know, a three- to five-year commodity down-cycle," he said on the Moneyweb Power Hour, a weeknightly business show broadcast on Radio 2000.
The market might not yet have peaked, he cautioned, but added the signs were there of the market reaching its top.
"At the end of the day watch the oil price, watch the gold price, watch the platinum price. They will tell you every day whether we’re in a commodity down-cycle or not. You don’t have to guess it. They will actually tell you," he said.
Gold has pulled back from 26-year highs and there's been excess speculation in other metals like copper, which has been extremely volatile over recent weeks.
"This is to me very typical of the top of the market and a change – and this isn’t a change in sentiment, this is a change in the fundamental movement of commodity prices," he said. ...(more)
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