'Go long' on commodities

31/03/2009

Return on investment in commodities markets will remain weak until the end of the year, Chris Bouckley, chief investment officer at Caliburn Capital has told Reuters.

The trading expert said that commodities such as crude, heating oil, DERV and gasoline will continue to put in a weak performance until the world enters a period of inflation, which he expects to happen after mid-2010.

Until that time, he expects that deflationary cycles will continue to put pressure on investment returns on crude, heating oil and other commodities futures.

"You want to start to be looking to go longer on all these commodities starting around Christmas," he advised.

A long position is used to take advantage of an anticipated rise in value, with traders buying futures contracts due to be delivered months or years later in the expectation that they will be able to sell them for more as the delivery date approaches.