Wednesday, May 21, 2008

More On Commodity Inflation

Below I mentioned that it looks as though certain commodities are now dropping in price. While we're not out of the woods, it appears things are setting up to ease. The following is from today's IBD:

Crude oil prices rose again Tuesday, hitting record highs near $130 a barrel and sparking a gold rally for a second straight session.

But the mixed performance in agricultural, softs and metals markets was evidence that the rest of the commodity complex was not following the dramatic rise in oil, traders said.

"All the markets have been overinflated by the fund buying in recent times, and as soon as that disappears, let alone turns in the opposite direction, there's not so much support to it," said a softs trader in Europe.

I'm going to throw up some charts of individual commodities later today to see what they say.