Prices of Metals and Commodities

With some of the prices of precious metals and commodities hitting the roof, I thought it would be clearer to look at the percentage change than just raw figures.
With fears of recession in US, these are some investments that are considered safe during times of crisis.

Item	Last Year’s Prices	This Year’s Prices	% Change
Crude Oil per barrel	US$65.68	US$109.95	67.4%
Gold Per Ounce	US$677.88	US$997.6	47.2%
Platinum Per Troy Ounce	US$1203.5	US$2099	74.4%
Corn	US$414.20	US$573	38.3%
Soybean	US$803.19	US$1412	75.8%
Wheat	US$498,50	US$1239	148.5%

Source: Adapted from ST Mar 15 2008

Some of the increases in the commodities could be due to the emergence of biofuel, which aren’t really environmentally friendly to produce, as large areas of vegetation are removed in order to plant cash crops such as corn. The increasing popularity of biofuel is due in part response to the increase in prices of oil, and the fear of dwindling supplies.

However, that has led to pressure on the prices of crops for food and animal feed. With increase in prices of wheat, now that fewer farmers are growing it as one possible reason, animal feed increases, and the price of meat will increase eventually.

This will lead to increase in food prices and growing inflation. For the poor to average consumers, they will be badly hit.

What does this mean for investors like us? Buy into oil, precious metals and commodities. There are plenty of gold certificates, unit trusts that focus on precious metals and commodities and other instruments such as direct oil and gas investment that allow you to capitalise on the increase.