Just like stocks, investing in commodities and earning a considerable return is an important skill that demands an understanding of the fundamentals related to them. However, commodities are different from stocks in the aspect that these are affected by a wider range of factors as compared to the stocks. The Majority of the factors included in the list are related to weather, new technological trends, geopolitical circumstances, etc. which may affect the prices of commodities like precious metals, agricultural produce or energy stocks.
An example of it can be given in terms of the investment made in the oil, mostly during early winter. Thus, an investor needs to analyse various factors before making an investment in any of the commodity, so that he can eliminate the chances of losses. We are here to discuss today’s current news in the form of the top commodities to trade in the year 2020, according to the various trade analysts and experts. So, let’s start the discussion.
Platinum: For most of the major investors, platinum has been a roller-coaster ride for them in the year 2019. But according to the majority of the experts, 2020 is expected to be a much brighter year for the investors. Platinum is most widely used in the industrial sector and if we become more specific than we would say in the manufacturing of diesel cars, which pollutes the air more than gasoline cars. This is the reason why during some of the last years, investors were worried that these cars would be pushed out of the automobile market. This reduced their interest in platinum as an investor. But emerging trends in the automobile sector are again bringing the platinum back into the limelight. For example, as platinum is an important metal used for the production of electric cars, this metal is expected to remain in the trend in the coming years.
Uranium: To many of the investors, it may appear a bit strange to invest in the Uranium. Moreover, the Fukushima disaster led to a reduction in the prices of the Uranium up to a huge level. The price went down from 79 dollars to almost 25 dollars in the year 2019. Prices were even lower in 2016. This crash affected many major players in the market. However, China is being considered as the main growth catalyst for this precious metal. This is because there are 11 new nuclear reactor plants in China under construction, apart from the 45 plants which are already operating there. Also, 5 plants are expected to start operating in 2020. China is planning to launch at least 5-6 nuclear plants each year in order to sustain its clean energy plans. Japan is also planning to reopen its 30 reactors in the coming years. All this will definitely lead to a huge rise in the demand for uranium which is expected to cause a hike in the price of the metal.
Gold: Since the beginning of the last year, the price of Gold is expected to be affected by the developments in China-US trade negotiations. Investors would move into riskier assets whenever a deal seemed close to them and at the time of the issue of any kind of statement by the US president, they would shift back again to the safer option which is Gold. During the fall of the year 2019, the attitude of the Gild was positive, which was actually not expected by the majority of investors. There were certain statements which were made by the US president at the end of 2019, which favoured the Gold investors as the price of the Gold was hiked by 1 percent in the international market. Trump’s latest tweet regarding slapping the tariffs on imports of metal from Brazil and Argentina created a more anxious mood in the market. But after considering all the other external factors in the international market and the approach being followed by the US to tackle the new recession is giving the market analysts hope that Gold is expected to grow in the year 2020. So, if you trust the skills of the experts, then you may get lucky enough!
Nickel: Many of the market analysts predicted that the copper will grow in the year 2020, but it may not be possible because of the slow economic growth. But nickel, which was not expected by the experts to grow much last year, shown amazing growth and grew over 30 percent as compared to the year 2018. The main factor which led to the growth in the price of this metal is the expanding stainless steel industry in China. Also, nickel is used in the manufacture of electric cars, which are the future of the automobile sector. This is why in the coming years you will witness a great rise in the demand of the Nickel. But if we focus on the supply aspect of nickel, then the shortage with respect to nickel is increasing. This kind of serious supply issues can lead to opportunities for the commodity investors, from which they can generate high gains ever.
Lithium: Platinum may be an important metal for the electric cars’ manufacturing, but if there is any other component other than that which is that crucial, then it is definitely lithium. According to experts, almost every kind of electric car model may require at least 50 kilograms of lithium carbonate. Almost 30% of the vehicles all around the world are expected to represent electric vehicles in the coming 10 years if we talk about the various research reports. Lithium-ion batteries are not only used in electric cars, but they are also used in individual power grids and also in smart-phones as they are considered safer as compared to another kind of batteries. When there is such a huge potential demand for metal like lithium, then it is guaranteed to witness exponential growth in such a component’s value in near future.
These were our top picks for the commodity investors to look for in the year 2020. If you are a business reader who is looking for a source which can provide you all the latest news updates and updates regarding the business world, then www.business-standard.com is the website for people like you. This website is an online property of Business Standard Private Limited, which is the publisher of one of India’s most popular business daily-Business standard. On this website, you can read all the articles and breaking news related to the business world, policy, economy, finance, stock market, etc.
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