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Article: Commodity plays?
- Article from:
- Investors Chronicle - magazine and web content
- Article date:
- February 12, 2008
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Mining stocks are plays on commodity prices, but there are better ones. Chris Dillow
Commodity prices should rise sharply later this year. That's the clear message from the fact that the US dollar is so weak. Our chart shows that changes in the greenback have been a superb lead indicator of commodity prices in recent years.
Although this relationship points to commodity prices falling a tad over the next few months - in response to the dollar's brief stability early last year - it suggests they will bounce back strongly after the spring.
What does this mean for mining stocks? The cliche is that these are a commodity play, so if commodity ...