Volatility in Commodities

Recent comments from a heavy hitting Swiss commodities management firm reflect on my previous observations. Metals markets are so active with new investors that surges and sell-offs have become a way of life. Be ready for this if you are entering the precious metals markets. Think in long term.

Consider another investment category if you cannot tolerate roller coasters.

Commodities markets in general have seen record levels of false price reporting and manipulation over the past year. The Commodity Futures Trading Commission announced yesterday that it has collected a record $540 million in penalties and restitution resulting from cases of fraud, manipulation and various misconduct. Higher market volumes have led to more fraud in commodities.

Don't think we've seen too much of that yet with metals, but I would expect similar trends to come our way in time. My best advice - get to know your market, and those companies and individuals you work with, before you invest.