Commodities could also benefit from increased automation and technology integration. Copper, silver and gold are great conductors of electricity and used in many electronics and electrical components for vehicles. As future car fleets become more technologically dependent and autonomous with the development of self-driving cars, there will be an increase in demand for metal conductors across aggregate systems.
“As these themes and technologies continue to become central to future economic growth, focus and demand for the next generation of commodities at the heart of these advancements will likely move in tandem. This may provide investment opportunities by capturing new sources of demand for current commodities as well as from the next generation of commodities,” Gold said in a research note.
Investors who want to use precious metals as a short-term hedge and even a long-term play may consider a number of physically backed metals-related ETFs as a way to diversify a traditional stock and portfolio, including ETFS Physical Swiss Gold Shares (NYSEArca: SGOL), ETFS Physical Silver Shares (NYSEArca: SIVR), ETFS Physical Platinum Shares (NYSEArca: PPLT) and ETFS Physical Palladium Shares (NYSEArca: PALL). ETF investors can also use the ETFS Physical Precious Metals Basket Shares (NYSEArca: GLTR) as a catch-all of all four precious metals.
Investors interested in diversifying their portfolios with other commodities exposure also have a number of ETF options available to them. ETF Securities came out with a line of ETFs to outperform the widely observed Bloomberg Commodity Indices without the need to worry about troublesome K-1 forms come tax season, including the actively managed ETFS Bloomberg All Commodity Strategy K-1 Free ETF (NYSEArca: BCI), ETFS Bloomberg All Commodity Longer Dated Strategy K-1 Free ETF (NYSEArca: BCD) and ETFS Bloomberg Energy Commodity Longer Dated Strategy K-1 Free ETF (NYSEArca: BEF).
For more information on the commodities, visit our commodities ETF category.