As 2014 comes to a close, we take a look at the financial sector to see how commodities have fared in the market. What this does is that it allows us to predict what the market trends will look like in 2015. As a result one can plan what commodities to trade in within the coming year in order to maximize profits.
A Brief Review of 2014:
- Gains: The year 2014 has seen quite a few highs and lows in the commodities market. The U.S. Stocks have increased considerably, despite a correction in September and October. Furthermore, the growth in earning and continual monetary support from the Federal Bank has ensured that the stocks thrive. The Standard and Poor’s 500 Index generated a total return of 10.35 percent year to date since November 2014.
With the Barclays Aggregate U.S. Bond Index generating a return of 5.19 percent, bonds have also proved to be a profitable investment.
- Losses: On the other hand, gold and oil have shown sharp declines. Gold has dropped 1.8 percent while oil is down by a staggering 18.2 percent.
Having seen what the market looks like in 2014, let us look at some of the predictions regarding commodity trade in 2015.
Best Investments for 2015
- Metal: The market for metals has shown a steady increase over the last couple of years. As of now, they seem to be a safe bet in terms of investing. The returns have been fairly high and those who wish to invest in commodity instead of stock can take a look at this sector.
- The cost of palladium has increased from $853 to $860 per ounce in the Canadian market.
- However, it is important to note that gold and silver have suffered an overall decrease. Metal prices are predicted to drop by at least 5.5%. The reduced demand for precious metals from China is a major contributor to the weakness of this financial sector. Hence while considering investments, traders are advised to follow the updated market trends.
- Farming and Crop: While 2014 has seen a general downward trend in commodity prices of crops, rice, coffee and cocoa seem to be the exceptions to the rule. This is because of declining crop prospects amongst Asian suppliers. The result is an increase in prices across all three commodities. Cocoa, especially, could see a further price hike due to the problems faced by workers many of whom have become victims to the Ebola virus.
- Industrial Sector: While oil prices have fallen steadily over the course of 2014, there is also an increase in the number of new plants being constructed for natural gas supply. What this means is that it is possibly safe to expect that investments in the pipeline companies will return higher profits. No matter what happens with the price of oil, the infrastructural details promise to be unaffected. In fact, many financial experts predict that the government will allow a widespread supply of oil and natural gas in the new year.
While investing in any commodity, one must always consider the market trends in the past year and keep in mind predictions from credible sources. Since financial trends fluctuate based on any factors such as foreign policy and international demand and supply, there is a need to follow the changes on a regular basis in order to make a profitable investment.
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