Among industrial and precious metals, COM is currently long copper and flat gold and silver. In the energy patch, COM is long crude oil, gasoline and heating oil while being flat natural gas. Among agriculture and soft commodities, COM is long cotton and is flat corn, sugar, soybeans and wheat.
With inflation rising, the time could be right to evaluate commodities ETFs, including COM.
“Commodities have tended to perform better during inflationary periods, and more often than not a rising GDP has coincided with higher U.S. Treasury Yields,” said Direxion. “When looking at US. 10 year Treasury Yields over the last 50 years, roughly 80% of those calendar years Inflation and Treasury Yields have moved in tandem. In other words, when GDP increased in a given calendar year that also represented an increase in Treasury yields.”
COM reduces the negative effects of contango and maximize the positive effects of backwardation in the futures market. Expiring futures contracts are replaced based on an optimization process that selects a contract from a universe of futures contracts within the next 13 month period.
For more information on the current affairs, visit our Current Affairs category.