Professional investors are forecasting a surge in commodities trading over the next 12 months as the so-called commodity supercycle takes effect, new global research from blockchain-based derivatives trading platform CloseCross shows.
Its research among professional investors around the world responsible for around $380 billion in assets under management, found 84 per cent expect the level of trading in commodities to increase in the year ahead with 29 per cent forecasting a substantial increase.
A key driver is that 81 per cent of them believe markets are entering a commodity supercycle where commodities trade above their long-term price trend for decades-long periods, the study for CloseCross, which is regulated under MIFID II rules found.
The professional investors, who include hedge funds, wealth managers, institutional investors, fund managers and IFAs, point to a boom In Government spending worldwide as economies recover from the COVID-19 pandemic as the biggest reason for the commodity supercycle.
Around 80 per cent highlight Government spending while 77 per cent point to bets on the greening of the world economy lifting commodity prices and 61 per cent believe strong demand from China is fuelling the supercycle. The weakness of the US dollar was cited by 53 per cent while 29 per cent point to low interest rates as a reason.
Around a third (32 per cent) believe industrial metals will see the biggest price rises over the year ahead while 27 per cent say precious metals will be the biggest price winners, the study for CloseCross which enables traders to generate profits through a simplified three clicks process of selecting an asset, predicting price-bracket(s), and committing funds to these predictions, for a variety of asset classes including crypto, stocks, indexes, commodities, and forex pairings.
However, 22 per cent believe the biggest price rises will be seen in oil while 13 per cent forecast strong growth in natural gas prices and 7 per cent point to agriculture as the best sector.
CloseCross CEO, Vaibhav Kadikar, says: “Commodities trading is set to surge over the next 12 months and the predictions of a commodity supercycle are driving increasing interest in markets.
“Professional investors are split over which commodities will see the biggest price rises over the year ahead and it could also be difficult for retail investors to forecast the sectors likely to benefit. At CloseCross we will be providing the retail traders contracts on both Gold and Silver, which will undoubtedly see interesting trades.”
CloseCross is regulated under MIFID II rules offering increased protection and transparency for customers. Unlike other trading platforms, there are no participation fees for using CloseCross, and its patented multiparty model ensures that leverage is not needed to achieve potentially outsized returns. Money placed on incorrect predictions is lost, but you never lose more than what you put in as there is no leverage needed or possible on the platform. Users pay facilitation fees, only on their winning trades, giving them significant savings when compared to traditional trading platforms.
The platform also provides real-time data on the predictions of other traders enabling investors to make a more informed forecast based on increased transparency. People can choose to follow the crowd or go on their own views.
