Grocery and Fuel Bill Relief: Commodity prices set to fall?
While changes in grocery and fuel prices will naturally lag behind the price of commodities, they are linked. In an article at kiplinger.com, we see that the commodity prices may be a bubble about to burst.
What’s the takeaway? Commodity prices are inflated due to speculation (ie: people wanting to make a quick profit). This speculation is further driven by lower returns in most other areas of possible investment.
ETFs are allowing more and more investors to jump in and out of the commodities market, increasing volatilty and adding to the market. The dollar is falling, which inflates prices as foreign suppliers try to compensate to maintain profits.
In the end, we’ll hopefully see a drop in some of these commodity prices in the summer but not that much as supply is still low compared to demand.
Have you seen these price increases recently? Have you changed any of your habits because of them?
