Paul Dietrich of B. Riley Wealth Portfolio Advisors said on “Craman Countdown” that gold “is going to perform very well.”
The S&P 500 and Nasdaq Composite may be breaking records, but commodities are having their own celebrations.
“Whether you’re a financial advisor or an individual investor, people are concerned about inflation, and that’s certainly true when you look at a lot of the U.S. and global economic data that’s come out this year. Inflation is still here to stay, and people at the gas station and at the grocery store are feeling it,” Ed Egilinski, managing director at Direxion, told FOX Business.
Cheese is up 19%, milk 32% and cocoa a whopping 195%, while U.S. crude oil is up 14%, silver 23%, copper 17.5% and gold 13%.
“I think this is relevant for people who are thinking about how they can participate in what they see every day and how they can potentially benefit from their investments. I think commodities are a way for people to try to express that in different ways,” he added.
A 99.99 percent pure gold ingot produced by Krastsvetmet, a Russian precious metals company that produces platinum group metals, gold and silver from minerals and recycled materials to make industrial products and jewelry. (Photo by Alexander Mancuk/Anadolu via Getty Images)
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| com | Direxion Shares ETF Trust Auspex Broad Commodities | 29.25 | +0.06 | +0.21% |
The firm’s Direxion Auspice Broad Commodity Strategy ETF (ticker COM) offers exposure to hard and soft commodities that can be “long or flat” and turn into sharp swings that are not uncommon in commodity trading, according to a description of the fund.
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“It’s made up of 12 different commodities — energy, metals, grains and soft sectors. But what’s different? It’s not a static, long, isolated, broad commodity solution,” he elaborated. “What’s unique is that if the price of a commodity is trending favorably, you go long that commodity. But if it’s an individual commodity whose price is trending downwards, that commodity goes into cash. So you can go long any commodity from 0 to 12 and anything in between,” he explained.
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“Right now we are long six commodities – gold, silver and copper – as well as crude oil, gasoline and wheat,” he added.
With inflation remaining unsteady, the Federal Reserve expected to cut interest rates at least once this year and geopolitical uncertainty, commodity trades, especially gold, could be in for a prolonged run.
In its central bank gold reserves survey released this week, the World Gold Association noted that “29% of responding central banks intend to increase their gold reserves in the next 12 months, the highest level since the survey began in 2018.”
