# which is the next metal or commodity



## SixesAndSevens (Dec 4, 2009)

in this commodity and metals boom, what do you all think can be the next commodity or metal to take off?
we all know about gold and now silver and copper.
cotton, soy and wheat's running up as well.
crude oil's rise is inevitable as well and already being factored into the market.
what's next that we can get in on fairly early?

anyone see any future for shale gas?
does nat. gas have any hope of recovering?
what about alternative energy like wind and solar?

on the metals front, anyone into rare earth metals?

btw, I'm speaking of holding the stocks of the producers or an ETF of the same, not commodity futures trading.

please share your ideas


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## dogleg (Feb 5, 2010)

You might like to investigate chromite and the ring of fire development. One of the principals Cliffs Resources ( CLF:US)has run up from around $30. to about $100. in the last few months. One of the properties 20 % owned by Cliffs is KWG . Worth a look.


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## Sampson (Apr 3, 2009)

Cold fusion.


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## Belguy (May 24, 2010)

As soon as you find out, fill the rest of us in on it so that we too can get in on the ground floor!!!

Have you considered the new Claymore Broad Commodity ETF?

http://www.claymoreinvestments.ca/en/etf/fund/cbr


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## zylon (Oct 27, 2010)

*Water*

Claymore S&P Global Water Index (CGW)

Water: Under-priced & Under-appreciated Part 1 (audio)
FinancialSense.com


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## Argonaut (Dec 7, 2010)

Platinum has lagged the other precious metals even though it's the rarest of the four. PPLT on the NYSE is a direct way to play it. I don't know if there are any ETF's in Canada but if so they are probably thinly traded.


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## larry81 (Nov 22, 2010)

sampson said:


> cold fusion.


lol


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## Causalien (Apr 4, 2009)

Lithium


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## LBCfan (Jan 13, 2011)

zylon said:


> Claymore S&P Global Water Index (CGW)
> 
> Water: Under-priced & Under-appreciated Part 1 (audio)
> FinancialSense.com


Is it also underwater?


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## dogcom (May 23, 2009)

I agree with argonaut that Platinum looks like a good bet here. With car companies ramping up production Platinum should be in demand.


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## kid5022 (Nov 14, 2010)

can we actually buy alternative energy like wind and solar? or only stocks?


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## Belguy (May 24, 2010)

Commodities poised to push TSX to new highs in the years ahead:

http://www.theglobeandmail.com/glob...eat/article1907040/singlepage/#articlecontent


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## cosmica76 (Jan 31, 2011)

Definitely gold such as a metal. Probably platinum is a favorable benefit at the moment.


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## kid5022 (Nov 14, 2010)

my bet is on silver
unless adam smith's invisible hand is off to work><


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## OhGreatGuru (May 24, 2009)

Rare earths. China supplies over 90% of world demand, mostly because they have 19th standards of pollution control and cheap labour.

World demand is going up; China's currency is going up; western world is getting worried about reliance on China for strategic minerals; western world is getting worried about China's despoliation of the environment. Rare earths are present elsewhere, but are expensive to extract cleanly. But they will become economic as price goes up, just as oil sands became economic as oil price rose. (A mine in Nevada just announced plans for a 10-fold increase in production)


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## marina628 (Dec 14, 2010)

cosmica76 said:


> Definitely gold such as a metal. Probably platinum is a favorable benefit at the moment.


I bought Platinum for first time Jan 2010 ,been a good investment


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## Toronto.gal (Jan 8, 2010)

Palladium has done exceptionally well for me, but regret having sold 1/2 my shares in stock below.

http://www.google.ca/finance?client=ob&q=NYSE:SWC


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## humble_pie (Jun 7, 2009)

(small dark cloud passing by in an otherwise clear bright sunny sky)

(cloud) (mumbling to itself):

they say that when folks get around to talking about rare earths, the end of the cycle is usually nearing.
we saw this in 2006/07 when the molybdenum craze struck.
bleep bleep bleep went the rare earth counters.
same arguments re china etc.
then the bottom fell out
in 2008.


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## Belguy (May 24, 2010)

The end is nigh!! The end is nigh!!!


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## humble_pie (Jun 7, 2009)

just the commodity cycle.

cloud mumbles keep an eye on mister copper.


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## m3s (Apr 3, 2010)

Causalien said:


> Lithium


+1


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## steve41 (Apr 18, 2009)

My youngest started working for a drilling company here in BC. 'Rare earths' is supposedly where the action is. He has instructions to call home at the appropriate time..... 

_"Dad. Guess what?" _ 

I plan to share with the forum. Not.


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## Brian Weatherdon CFP (Jan 18, 2011)

Amazing discussion.....yet I'm wondering "over what time period." 

OK you were asking of the "next" hot commodity. What if you guess wrongly?

So if there is dynamic movement among many commodities/materials we don't so much need to guess which one is next, but rather have a strong position that embraces the overall movement. I realize many readers here despise fund management however there is excellent positioning with Dynamic, Mackenzie, and others where we don't have to do any guessing at all. ...and this means we're at less risk of getting it wrong.

I don't look out over the ocean trying to guess where the next wave is appearing. I can enjoy the action of an incoming tide and the waves everywhere. No guessing; but a solid perspective on the wider picture.


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## m3s (Apr 3, 2010)

So what about an ETF like XMA with a MER of .55 instead of paying someone 3% to guess where the waves will appear?


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## fatcat (Nov 11, 2009)

i think investing any large amount of money in metals is a fools game as it simply is too volatile (i do own xma which also potash and timber in additon to silver and gold however) nevertheless, if i were buying i would say palladium since is, as far as i understand, can replace platinum in catalytic converters so it should be an alternative to the much higher priced platinum .. this is from: http://www.benzinga.com/trading-ideas/long-ideas/11


> /01/770486/etf-showdown-platinum-vs-palladium
> All that said, PALL and palladium look like the better bet. Using the automotive market as a potential catalyst, palladium is used for catalytic converters in American and Chinese cars and those are the two biggest auto markets in the world. Palladium prices have already surged five-fold since 2008, but Royal Bank of Scotland expects the metal to continue its bullish ways this year. LGT chimed in, saying palladium prices could average $888 an ounce and trade as high as $1,111 an ounce this year.


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## LBCfan (Jan 13, 2011)

Over the next couple of years, I'd bet on foodstuffs. Supply is low, demand is not all that elastic (say compared to copper, iron ore etc) and the number of consumers increases every year. Even with record world crops, supplies will remain low. With crop failures like this year, look out.

Things that increase food production should follow (or, maybe, lead), fertilizers maybe?


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## Argonaut (Dec 7, 2010)

fatcat said:


> i think investing any large amount of money in metals is a fools game as it simply is too volatile (i do own xma which also potash and timber in additon to silver and gold however) nevertheless, if i were buying i would say palladium since is, as far as i understand, can replace platinum in catalytic converters so it should be an alternative to the much higher priced platinum .. this is from: http://www.benzinga.com/trading-ideas/long-ideas/11


Palladium and silver have come up too much in relation to their bigger brothers, platinum and gold. During a metals crash, the time would be ripe to buy the little brothers instead, because they'll fall faster and have more room to recover. Platinum is extremely rare and of higher quality than palladium, it deserves the higher price.

You never know what will happen, silver and palladium could outperform again this year. But I have my money on gold and platinum right now. If it's a "fool's game", as you say.. then colour me a fool. But precious metals is where I've made the lion's share of my returns.


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## Belguy (May 24, 2010)

Generally, I am an ETF investor but I have always been more than happy with my holding in the RBC Global Precious Metals Fund which has consistently been a top performer with management that has had an excellent track record. I am content to leave the decision making as to which precious metals and when to the fund managers with one of the best performance records in the business.

http://funds.rbcgam.com/pdf/fund-pages/monthly/rbf1038_e.pdf

My 700th post!! Whoopie!!!


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## sags (May 15, 2010)

Oil has climbed from $31 per barrel in Feb 2009, to $94 today. It has tripled.

The last time oil prices spiked, when it hit $147 dollars per barrel, it caused the recession.

http://research.cibcwm.com/economic_public/download/soct08.pdf

Will the new higher oil prices cause another recession?

If so, what commodities or metals did well during the last one?

Looks like soft food futures, such as sugar, coffee, soybeans etc.

I have no idea how to invest in them though.........

http://www.hardassetsinvestor.com/features-and-interviews/1/1463.html?Itemid=63&topic=4


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## plen (Nov 18, 2010)

sags said:


> Looks like soft food futures, such as *sugar, coffee*, soybeans etc.
> 
> I have no idea how to invest in them though


Looks like we should be shorting THI


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## humble_pie (Jun 7, 2009)

rare earth madness in full swing.

avalon AVL is a collection of canadian exploration claims in early stage dressed up with a crowd of plausible, indeed convincing, management & direction. Reportedly, top performing US small cap fund Encompass is a big backer.

most advanced avl project is a biggie. Thor in the NWT is moving to feasibility study. It's a large but reportedly low-grade light metals deposit located in the middle of frozen nowhere. No roads. No shipping. Air transport only. Will cost over a billion $ to develop the mine if indeed construction ever happens in our lifetime. Let the air swoosh out of rare earths & Thor will sink back into oblivion. 

feel like gambling ? avl is listing brand-new options in montreal tomorrow. But not to try yet. Spreads are usual-montreal-crazy. Better to wait until some liquidity beats them down to reasonable level. If it ever happens.

O tempora O mores.


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## Causalien (Apr 4, 2009)

I never looked into rare metals. Sounds like a scam to me.
There was a feasibility study done on the profitability of rare metals mining outside of China. I believe somebody said that it is only successful in China due to the cheap labor cost. 

Anyone agree with that analysis?


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## kid5022 (Nov 14, 2010)

I think anywhere with cheap labor the right tech and transportation system is feasible


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## LBCfan (Jan 13, 2011)

Causalien said:


> I never looked into rare metals. Sounds like a scam to me.
> There was a feasibility study done on the profitability of rare metals mining outside of China. I believe somebody said that it is only successful in China due to the cheap labor cost.
> 
> Anyone agree with that analysis?


It depends on what they cost to produce and what they sell for. China just slashed exports. That should reduce supply and increase price assuming there is demand. If they don't come from China they will come from somewhere else. How profitable they will be remains to be determined.


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## humble_pie (Jun 7, 2009)

this is exactly what rumour said in 2006/07, at the time of the molybdenum craze. Folks were going ballistic over the alleged chinese clampdown on rare earths export.

other, possibly wiser, voices were saying that rare earth frenzies often characterize the end of a metals boom.

as a matter of fact, the crash of 08/09 did end that particular metals boom.

as for chinese export, i have never seen one single knowledgeable expert testify as to what, exactly, the chinese did do from 2006 to 2011. I have read that china continued to sell rare earths to japan.

somehow this whole story has something of an urban myth quality to it ...


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## fatcat (Nov 11, 2009)

> If it's a "fool's game", as you say.. then colour me a fool. But precious metals is where I've made the lion's share of my returns.


 right, i used my words poorly, investing a substantial portion of your portfolio in metals is always a risky venture as history shows us time and again how investment mania turn into bubbles and can deflate overnight and ruin many a fortune

this is not too say that people don't make good money on metals, some people do, even large fortune's

it's just not a sector for the untutored or unaware investor, who often end up looking like fools when they get in at the end


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## SixesAndSevens (Dec 4, 2009)

rare earth is indeed an intriguing story as you say humble_pie.
i have been following REMX and seen it do nothing for several months.
thankfully I haven't invested.
when looking for the next metal or commodity there is no use getting into something that has already had a decent run up and has been noticed by the majority of investors, big and small
it's important to find something and get in at the ground level and ride the elevator up.
the boats for oil, gold, silver, cotton, wheat and maybe even REM have already sailed.
Palladium chromite and water are interesting suggestions. i'll look into it

does anyone have any opinion on shale gas? it is a viable alternative to crude oil?

alternative energy companies have been a disappointment.
i've owned and sold a few in the last few years and none of them has been a stellar performer in any way.
solar cell manufacturers haven't seen much growth either.
there are technological constraints that i think these will not become mainstream anytime soon.


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## peterk (May 16, 2010)

Causalien said:


> Lithium


I'm also intrigued by the potential of lithium in the coming decades and I'd be interested in hearing other's findings. I've just been reading up on it and it appears Chile, Bolivia and Argentina have the lock on easily accessible lithium evaporites. There are also massive reserves in china. It seems that the real "play" in lithium comes from the expectation of there being a HUGE demand for electric cars much faster than the lithium mines can be turned on. Which will jack the price through the roof. Other than that though I would be wary that the electric car movement will happen much slower than many are anticipating, and that Li supply will be enough or overly abundant.
It seems the two companies that are major right holders for South American Li mining are ROC and SQM. But from what I can tell Li is a small part of ROC, and SQM is currently commanding 40x P/E for it's stock.

http://lithiumabundance.blogspot.com/

Read this for a good primer on Li production.

I'd be very interested to hear what others have learned about the potential of this metal.


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## Causalien (Apr 4, 2009)

SixesAndSevens said:


> rare earth is indeed an intriguing story as you say humble_pie.
> i have been following REMX and seen it do nothing for several months.
> thankfully I haven't invested.
> when looking for the next metal or commodity there is no use getting into something that has already had a decent run up and has been noticed by the majority of investors, big and small
> ...


The brakken shale oil's break even study is at about $100 per barrel. However, the study also mentioned that as the cost of oil increases, the cost per barrel of shale also increases unless a more efficient method is found, we are stuck with fracking and freezing the wall to collect the oil, which requires gas/oil/whatever energy is cheapest.


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## humble_pie (Jun 7, 2009)

shale oil is not shale gas.

i have not seen any bakken fields study postulating breakeven at 100. Not even for US companies working the bakken in the dakotas, where the shale is buried far deeper in the earth (canada is lucky; bakken shales slope downwards to the south.)

somehow it does not seem believable that cpg could have been pumping & selling bakken oil all these years, in addition to paying out a massive annual distribution to shareholders, if they were losing 30 to 40 bucks per barrel.

i don't think anyone has an answer yet on shale gas. All that's known is that global deposits are prolific, environmental concern is hyper-acute, and north american gas prices are presently depressed.


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## cosmica76 (Jan 31, 2011)

Thanks for your agreement. I´m really surprised from this commodity on the forex market, of course positive surprise. 



marina628 said:


> I bought Platinum for first time Jan 2010 ,been a good investment


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## ILT (Jan 31, 2011)

I have a good tip for a brilliant investment currently. Coffee! This aromatic commodity will be successful journey of the investment in these days.


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## Taxsaver (Jun 7, 2009)

SixesAndSevens said:


> in this commodity and metals boom, what do you all think can be the next commodity or metal to take off?
> we all know about gold and now silver and copper.
> cotton, soy and wheat's running up as well.
> crude oil's rise is inevitable as well and already being factored into the market.
> ...


Seasonality say that copper has its low in July, so copper will be on my radar.

You probably saw article on copper below.

Here is price chart of copper. One would have made 400% profits if he had bought in around January 2009 and sold in the arounds of November 2010.

http://www.kitcometals.com/charts/copper_historical_large.html

http://www.google.com/hostednews/ca...qM5iqzD8V-eMZ68UMnTiqVb-CiiB0Uw?docId=6670726

Copper swiftly becoming the new gold - and more profitable, says expert
By Mary Gazze, The Canadian Press – 2 hours ago

TORONTO — More big miners will likely follow the world's largest gold company into the copper sector as metal's price soars alongside Chinese industry's growing hunger for the metal, says one expert.

Canada's Barrick Gold Corp. (TSX:ABX) took a bold step into copper Monday with a friendly $7.3-billion bid to acquire Equinox Minerals Ltd. (TSX:EQN). Other gold players will likely follow suit with copper mining becoming increasingly lucrative as China seeks to meet its need for the metal used in electric cables, cars, cellphones and trains, said Scotiabank commodities specialist Patricia Mohr.

"Copper is much more profitable than gold. Considerably more, even with the record gold prices we've been seeing recently. That's why I've been calling copper the new gold."

Copper is likely to hover around record prices for the next few years, because there isn't enough supply in the world to feed China's demand, which will climb even higher this spring as better weather leads to construction season, Mohr said.

The price of copper was trading at US$4.33 midday Tuesday, below the record of $4.60 set in February. But Mohr said copper is still bringing in "huge" profit margins.

"Even at $4.29 you have a 68 per cent profit margin," she said, adding that other metals bring in about 50 per cent.

Consolidation will inevitably see smaller players swept up as the major global miners look to get into the industry and diversify with little risk. The number of available gold mines is wearing thin, so gold miners have to look to other metals to grow their business.

Mohr said opportunities to buy smaller, established copper miners are rare, and with the price of copper so high, many companies could start bidding wars to get their hands on one.

Mohr said the price of copper should come back down when new mines open, but it will be the hottest metal on the market until that happens in two years' time.

Copyright © 2011 The Canadian Press. All rights reserved.


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