All commodities have experienced a large, much-needed correction. Oil, energy, metals, food; all the basic materials. The dollar has made a large move up. However, I’m not certain that we are at the beginning of a strengthening dollar just yet. I still believe America has a large inflation problem. Though there seems to be more evidence of global growth slowing down, which would bring down the price of commodities and materials down even more, I think now is a good time to take advantage of the dollar and commodities correction.
Here’s a chart of the Euro versus the US dollar:
There may or may not be further downside for the Euro. I’m guessing the dollar will weaken again over the next six months.
Here’s a chart of the gold ETF:
Gold usually increases along with inflation and oil. If we’ve got an rising inflation and oil, gold will go up.
Here’s a chart of the price of platinum:
I particularly like the prospects for platinum. I recently purchased some Jan. 2010 calls on Stillwater Mining (SWC), the only US producer of platinum and palladium. With many good reasons to expect a continuation of a commodities bull market, and this recent large correction, I felt the time was right to make such a purchase.
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