I predict that over the next few years, the commodities markets will be lucrative for traders who are ready. You do not want to get left out of this upcoming market opportunity. We are in the midst of entering the second wave of the continuation of the major move in the commodity markets in the past thirty years. Almost every market has made gains, consolidated, and is now picking up momentum back to the upside. If past bull market history is any indicator, prices of almost every commodity will likely take off to new all-time highs over the next 24-36 months. To give you an idea of what I think is in store, take a look at my top five picks for 2007:
1 - Gold
Buy! I think that for at least the next few years, the bottom of gold prices will remain near $550. Even though it ceilinged at more than $600 per ounce, the gold market later underwent a correction, retreating about 50% to between $625 and $525. When I wrote this article, the price had inched back up to $630. My forecast: gold will increase beyond its record high to hit more than $1,000 per ounce. Because gold prices beat those of silver, I recommend gold over silver. It would amaze me if gold drops below $500 in the near future, but I can surely imagine it elevating to over $2,000 per ounce in the next year and a half.
2 - Cotton
Cotton has been, up to this point, sort of a "weak sister" in the overall bull market in basic commodity prices. Whenever it finally joins the flow of the overall market, expect it to play catch-up rapidly. Today, cotton is languishing around the 50-cent level, despite steadily growing export demands from China and India, and because the cotton belt across the South still has not fully recovered from the devastation of Hurricane Katrina. My prediction: cotton will double in price during the next 24 months.
3 - Wheat
Of all the grain futures, wheat has indicated its staying power since the first days of today's bull market. Even when USDA reports plummeted soybean and corn prices, wheat continued to push ahead. For wheat, I have a long-term price target of $8-$10.
4 - Cocoa
Cocoa has been acting a bit like the gold market--that is, it spent a number of years going not much of anywhere at all, and certainly not higher. Then, at the start of the current bull market, it shot all the way up to the mid-20s in price. Since then, it has backtracked down the to the $14-$15 level, and has recently shown signs of bottoming out and recovering. Look for cocoa, like nearly every other market, to zoom back up, setting new all-time highs during this second leg of the bull market. If you missed the run-up the first time, don't get left out in the rain again. Buy cocoa.
5 - The CRB Index
The CRB Index is the easy way to benefit from gains across the entire commodities market, which now happens to be the strongest bull market we have seen. In the 1980s and 1990s, many people spent too much time researching winning stocks. In those days, it was practically a free ride to Easy Street to invest in the Dow Jones or S&P indexes. The CRB Index works the same way for commodities. Especially for wet-behind-the-ears investors, the CRB Index allows you to benefit from all market momentum without having to specify a certain hot market and investment time. As in all markets, every commodity market has its good days and bad ones, but in general the market always trends up. We are living through a bull market, after all.
The chance to make money in the commodity markets over the next 5 years is the single greatest investment opportunity that I have ever seen. I can't imagine another one like it within the next 50 years. Do not miss out on this chance to create a fortune that could take all your financial worries away, in the investment horizon of just a few years.
Halston Adams is a retired futures broker who learned the keys to generating annual returns of 100%+ from successful traders he befriended. Check out more about his trading approach at:
Futures Trading Secrets today.
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