Commodities as inflation hedge

Discussion in 'Trading' started by Lojanica, Mar 4, 2010.

  1. FYI Natural Gas and some Soft Ag's and grains are cheap if and when inflation hits. Metals are too extended. These commodities will be good hedges against inflation and with macrotrends in currency crosses are your friend once the interest jack after monetization begins.
  2. No tells yet on UNG, Its hitting lows, but it could hit lower..
    Waiting for some tells would be safer.

    I do agree UNG is looking very cheap, but it looked very cheap @ $20..
    and $15 ..
    and $10 :D

    Wait for the turn.
    A turn would be Price > $11
  3. Agreed but that not how I trade. I like to be punished a little now and then.

    I'm in but my time horizon is Looooong!!!
  4. The "tell" is we made a new low on NO VOLUME. Not alot of selling. I would like to see a blow off day with huge volume and price reversal but I'll assume there is a floor under NG as this is gonna be a major fuel source for North America for the next 100 years.


    I'll buy more as it drops and we we get the blow-off reversal day sweet!!!
  5. I like the idea of inflation hedging trough commodities.

    Only problem with them is the lack of visibility what drives most of these markets fundamentally.

    If banks are bankrupt or apear so, people turn to gold.

    That I understand.

    How can I distinguish the same mechanisms say in the soybean market.

    I can't.

  6. Absolutely. More of a "basket" of inflation risk hedge. I think the metals were great say when gold was 250 - 450/ oz but at 1200 I think I'll turn to consumables which have to purchased with paper currency at a discount. But yes there is risk in any strategy.
  7. You got it. I'm actually surprised this hasn't caught on to the general public more than it has. I am long ECA - as well for the long haul.
  8. promagma


  9. Thank you. That's what I thought. Oh well there is zero chance we won't roll through today's spike down.

    I suppose you need to invest in the suppliers but it's too early for that insofar as a shakeout is in the making as smaller producers are unable to support operations with price this low. In the long run a supply shock will occur.
  10. JPope


    If your goal is to invest for the long term, you can avoid the roll effect by buying deferred futures. QG's are on the board out to 2015 which can be bought for mid $6's. $1000/margin.
    #10     Mar 4, 2010