Commodity Insights

Although speculation is often blamed for causing problems in markets, the economic evidence shows that overall it is a necessary activity that makes markets more liquid and efficient. This, in turn, benefits hedgers, investors, and other market participants. Speculation increases market liquidity by reducing bid-offer spreads, by making it possible to transact more quickly at a […]

Perceptions about the financialization of physical commodity markets are raising concerns about the impact of investments on commodity price changes and volatility. While financialization is a trendy concept, there is little evidence that supports the idea that it is unduly affecting commodity markets, as a number of research articles and papers have highlighted. University of […]

Volatile commodity prices have spawned a plethora of reports by government agencies, academics and researchers. From these efforts, it is clear that fundamentals factors that affect the supply and demand of commodities are the key drivers. These factors include demographics, weather, trade flows, production quotas and export controls. Here’s the evidence that supports this view: […]