There is a lot of pessimism among investors who believed commodities were a great place to invest money. Commodities have performed rather poorly since 2011 and have been in a brutal bear market. Matt Badiali is a geologist and a financial advisor who feels that there are some commodities that are about to regain glory, particularly silver and copper. With commodities beaten badly, most investors will probably avoid them, however, Matt Badiali has written about why the commodities have not performed well, but also why he feels certain commodities, such as silver and copper, are on the verge of major moves to the upside.
Both copper and silver have had to fight the strengthening US dollar. When the dollar strengthens, commodity prices tend to fall. With all the geopolitical uncertainty and the economic problems of many of the emerging market economies, the US dollar has been the safe-haven asset for investors. People all over the world have been trading in their local currency for US dollars, as their own currencies have lost value. Matt Badiali believes that if the US dollar continues to strengthen, there will still be more pressure on the commodities. He is advising investors to focus on the long-term fundamentals for both silver and copper.
Matt Badiali is very optimistic about silver in the long-term and mentions the extreme gold to silver ratio being eighty-four. Every time the silver to gold ratio hits this extreme, silver tends to rally. In 2011, silver rallied to almost $50 an ounce. There are many analysts who feel that silver is on the verge of a major breakout and some of the more optimistic analysts believe that silver will hit triple digits. Mr. Badiali mentions that silver is going to be necessary for many of the solar projects that many countries plan to undertake over the next few years.
Matt Badiali is extremely bullish about copper. He feels that copper prices should not be falling because copper demand is higher than the supply. The area he believes is going to launch copper is the electric vehicle. China is one country that is requiring its automakers to have a portion of their auto sales be electric vehicles starting next year.
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