Commodities Head for Biggest Monthly Rally Since July 1974, Led by Energy

[Purveyor]

Source: Bloomberg

By Halia Pavliva and Millie Munshi

May 29 (Bloomberg) -- Commodities headed for the biggest monthly rally in 34 years, led by energy, as the slumping dollar boosted demand for raw materials as a hedge against inflation.

In May, the Reuters/Jefferies CRB Index of 19 energy, metal and agricultural prices has gained 14 percent, the most since July 1974. The dollar was poised for the biggest monthly drop since August against a basket of six major currencies.

Signs of a recovery in the global economy have spurred demand for fuel, industrial metals and crops. Crude oil was set for the biggest monthly gain in a decade. Gasoline has soared more than 30 percent in May. Gold copper surged, while corn and soybeans reached the highest since September.

“The belief that the world economy is not going down into a black hole anymore has brought a lot of investors back in,” said Peter Sorrentino, who helps manage $13.8 billion at Huntington Asset Management in Cincinnati. “You also have the threat of inflation, and that means that people just want to have hard assets.”

The CRB index gained 1.1 percent to 252.62 at 11:48 a.m. in New York, extending a rally to the highest since November. The dollar was poised for the third straight monthly drop against the currency basket, partly on demand for assets with higher returns.


Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aMSKbac7ASfE&refer=home

[The_Casual_Observer]

1. Rally or hyperinflation?

[jwirr]

2. The rise in the cost of energy will stiffle the recovery in other industries. nt

[Purveyor]

4. Our local fuel prices have increased for the 3rd time this week.

Gasoline is now $2.75g and diesel back up to $2.50

[Joanne98]

3. Oil hoarding

[high density]

5. How high are we going to go this time?

It would be nice to have more than a year between our insane speculation cycles.

[pattmarty]

6. I read somewhere this past week (DU?), that there is still plenty..............

................of supply on the world market and the recent quick rise in prices is due to speculation (again).

[durablend]

10. And of course, nobody's going to lift a finger to stop it

After all, people investing that money make it look like the economy is improving.

[paulsby]

7. lots of money to be made in commodities

they should be part of every portfolio imo

[Wednesdays]

8. K&R

:kick:

[CHIMO]

9. Loonie soars 8 cents in May, finance minister concerned

The Canadian dollar jumped 1.90 cents to 91.60 cents US on Friday, a run-up of about eight cents since the beginning of May.

The loonie was last above 91 cents in early October 2008.

Finance Minister Jim Flaherty said the rapid rise is cause for concern and that Bank of Canada governor Mark Carney is monitoring the situation.

Speaking at an infrastructure event in Toronto, Flaherty said the government is always concerned about rapid changes in the Canadian dollar, which can have a major impact on exporters and the troubled manufacturing sector.

http://www.cbc.ca/money/story/2009/05/29/dollar-loonie-soars.html
Last Updated: Friday, May 29, 2009 | 5:27 PM ET