Tokyo, Japan, May 12, 2016 --(PR.com
)-- Paramount Trade has told clients that it expects commodities to continue to outperform in 2016 as the US dollar continues to weaken.
In the Tokyo-based investment boutique’s 2nd quarter clients briefing, it cites the price action in commodities like oil and gold so far this year as being indicative of a broad-based recovery in the asset class.
Describing raw materials as “chronically oversold”, Paramount Trade says bearishness towards commodities reach its zenith at around the time the US Federal Reserve raised US interest rates for the first time in a decade in December 2015. Since then, it says, there has been a rebound in prices particularly for precious metals like gold and silver and crude oil.
“Much of the overshoot to the downside in gold lay in the strength of the US dollar which itself was rooted in the perception that the Fed would be raising interest rates several times in 2016,” said the briefing’s editorial.
“Confidence in the Fed’s ability to actually do what it says it wants to do has largely waned and that’s weakened the dollar which is what most commodities are priced in,” said Narumon Epps, chief economist at Paramount Trade who wrote the editorial.
Gold prices have rallied by as much as 21% in 2016 buoyed by a weakening dollar and investment appetite in China and elsewhere. The firm advises clients without exposure to consider buying on pullbacks in prices but cautions against buying into rallies in commodities like iron ore. “The rally in prices of iron ore and copper are unsustainable right now. Prices aren’t supported by fundamentals,” said Epps.
About Paramount Trade:
Paramount Trade provides a "premium-class" investment management/advisory service built on disciplined and highly-focused strategies. Our services aim to afford high value to our clients by providing high returns and imaginatively constructed portfolios centered on a holistic approach to catering to our clients' needs. A significant majority of our clients are individual investors but we also service several institutional clients and maintain close professional relationships that continue to endure through both bull and bear markets.