Commodities That Have Thrived Under President Obama

Page 1 of 2

As an asset class, natural resources often get lumped together, falling under a single weighting in one’s investment portfolio. After all, the most popular approach by many retail investors is through an ETF or futures fund that tracks a basket of commodities. The PowerShares DB Com Indx Trckng Fund (NYSEARCA:DBC) and iPath Dow Jones UBS Commodity Index Total Return (NYSEARCA:DJP) are two of the most popular options for investors [for more commodity news and analysis subscribe to our free newsletter].

Barack Obama serious

However, natural resources are completely distinct animals and behave differently due to various demand, supply, weather and other external factors. Believe it or not, one of those external factors can be who’s in the White House. Since President Obama took office four years ago, a certain set of commodities have thrived in both production and price increases. With Obama winning another term, it stands to reason that these commodities have a good chance of seeing gains in the new term ahead.

Gold

Since the onset of the Global Credit Crisis, Great Recession and subsequent meager economic recoveries, gold’s safe haven status has been sought out by investors, and the yellow metal’s value has risen. As the various global stimulus plans, quantitative easing programs and money printing have persisted, investors have flocked to gold as a way to protect their purchasing power. Since President Obama was elected in 2008, gold is up nearly 116%.

There’s plenty of reason to believe that streak will continue into 2013 and the rest of his term. First, many of the same factors plaguing the economy in 2008 are still here: high unemployment, $16.4 trillion in Federal debt and slow economic growth. This means that President Obama will likely keep U.S. Federal Reserve Chairman Ben Bernanke–and his easy money policies–employed for the next four years. Back in the beginning of November, San Francisco Fed President John Williams hinted that the most recent QE3 bond buying program could well exceed $600 billion [see also Big Money Betting On Commodity Bear Market].

Add this to Europe’s continued debt mess and the European Central Bank’s own version of easing, and it’s easy to see why gold, silver and the rest of the precious metals space should continue their meteoric climb. All in all, analysts predict that gold will hit $2000 to $3000 an ounce in the next four years.

Silver

Not to be outdone, poor-man’s gold i.e. silver has also surged in the four years since Obama has been elected. The metal–which benefits from many of the factors that have buoyed gold prices–has surged a whopping 198% in the last four years [see also 4 Silver Miners That Pay a Dividend].

However, the ace up silver’s sleeve is not only its precious metal status, but its use in a wide variety of industrial applications as well. The metal is used in the automotive sector and across electronics manufacturing. New sources of cleaner energy such as solar cells and silver-oxide smart grid batteries, along with various electronic devices, account for more than 75% of the silver that is mined. This built-in industrial demand provides silver with a much stronger price floor than gold.

Silver also benefits from its lower price relative to gold. An ounce of silver costs a fraction of what an ounce of gold does, yet silver provides many of the same safe haven benefits. For smaller retail investors, the metal’s appeal is easy to understand as the financial uncertainty plays out in the markets.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!