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Commodity prices still likely to fall: Kames

Commodity prices still likely to fall: Kames

Investors should remain wary of commodity markets, despite some prices appearing to stabilise, Kames Capital chief investment officer Stephen Jones has claimed.

Mr Jones said while oil and copper appeared to have hit a floor in terms of price and were enjoying strong inflows through exchange-traded funds, the main factors depressing prices remained.

He said: “When you look through short-term factors for commodities, for example unrest in the Middle East and its impact on oil, analysis inevitably reverts back to supply and demand dynamics to dictate the price.

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“A rampant US dollar, large build-ups of reserves and few signs of increasing demand mean commodities continue to be challenged.”

Mr Jones also said that commodities, including iron ore, coffee and sugar were still falling in price.

Adviser view

Michael Stanes, investment director at Heartwood Investment Management, said: “Since mid-April, we have seen a pullback in the strong US dollar trend, while commodity prices have stabilised.

“We may infer that the worst may be past for this year regarding trade and energy-related weakness, but it is the slowdown in domestic demand that is more worrying.”