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RBC with the note. Herein lies the problem with commodities as an inflation hedge. They are not supply-constrained for very long and when the hoarding tide breaks, speculative demand panic exits.
Last month, we postulated that we could see a bottom as AUM across the sectors we track in this piece had managed a three-month incline.
While the underlying trends had largely decelerated in many respects, we were focused on the gold space, which could have been a significant source of stabilization, given the extent to which it dominates ETPs. However, this month, ETPs did not gain strength overall and the deceleration in the index space turned to outright declines.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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