Why Invest in Commodities

Every year we consume more commodities which have to be replaced. As a result, the drivers of commodity prices are different from those of financial assets.

Factors that affect commodity prices are supply and demand. A commodity in short supply will be more expensive than in times of over supply. Supply disruptions are mainly attributed to adverse weather patterns and geopolitical tensions.

The differing supply and demand drivers are the basis for the robust diversification that commodities provide in an investment portfolio.

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