Here’s how women should look at commodity investments

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Commodities are part of everybody life. Women have great exposure in this avenue and it works really well in most of the phase of the economic cycle. So why not to include it in our portfolio when women already have the exposure, whether it is bullion… her favourite, agriculture or crude. After all, they are managing almost everything in and out.

Last year, commodities were ruling the leader board on the global financial markets. In fact, we were discussing about the beginning of a new super cycle.

However, the situation has changed a bit now and looking at the present scenario, it seems like this dream will take some time to become true. The theme of this article is to discuss the factors that are acting as a roadblock or as a hump, slowing down the speed of the gains in commodities.

In 2021, so far we have seen that the premium in commodities has been reducing and it is losing the charm. We are blaming it to reversal in dollar index amid better than expected return in US treasury yield, which has negative correlation with commodities. In 2020, vaccine optimism, easy money coming from stimulus from government’s worldwide, investment driven demand drove the sentiments high lead to a swift recovery in commodities after a huge slump witnessed when he world went under lockdown due to pandemic.

Low interest rate, V- shape recovery, improvement in data like PMI, export, import, shipping activities etc. amid tight supply situation kept the prices in upper range. However, the optimism couldn’t stay for long as the physical demand for commodities were not enough to fight against the hunch of financial crisis of the market participants.

(The writer is AVP, Commodity Research, SMC Global Securities. Views expressed are personal)