Crude Will Have to Lead Recovery
The recent spate of downbeat economic data coming out of the three major world economic powerhouses -- the U.S., China and the European Union -- have helped to send the raw commodity sector into a serious swoon. The commodity market bulls were dealt a fresh blow this week when the International Monetary Fund warned in a report that the European Union is at risk for deflationary price pressures if the bloc cannot get its sovereign debt and financial crisis under control soon. Deflation is the archenemy of raw commodity market bulls.
An examination of the weekly chart for the Continuous Commodity Index, or CCI, (a basket of 17 major raw commodity futures prices rolled into one composite index) shows prices are in a 12-month-old downtrend. The past six weeks have seen the CCI downturn accelerate. The year 2012 kicked off with an upside spurt in many raw commodity market prices, which gave many traders and investors a notion the very accommodative monetary policies of the world's major central banks the past few years would ignite inflationary price pressures to send the commodity markets on another bullish stampede, such as that which occurred in 2008....214 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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