Should Be In Gold, Grains and Gas: Smith

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Mar. 3 (Bloomberg) –- Global Commodities Managing Director Greg Smith discusses the commodities investors should be thinking about. He speaks to John Dawson on Bloomberg Television’s “On The Move Asia.” (Source: Bloomberg)

My next guest has been trading commodities for more than three decades.

Thank you for having me, john.

Our serious topic, ukraine fallout.

What should investors be doing?

There are three issues they need to think about.

It is goal because of global concern about what is evolving.

So that should be bullish for gold.

Oso for the grains, if they start to reduce exports, the growing process will grow up -- will go up.

And gas prices, that will have the effect in the u.s. market as well.

So the grains, precious metals, and maybe gas, brent crude oil.

It's when you heard the headlines from ukraine, what did you start trading?

I started buying more gold.

Gold is an insurance policy.

Safe haven.

Exactly.

You sort of follow the herd.

The other thing is i think the chinese will be buying that as well.

There is enough in china to support that.

So bold is the first and foremost whenever you have a problem like this, john.

Looking at wheat, drought, a very cold u.s., prices going up there as well.

Coffee, prices are up 62% this year.

It is extraordinary.

The drought in brazil, australia, where you come from, the u.s., and parts of asia.

It is pretty intense.

You have a lyrical uncertainty.

You have the cold snap.

How do you play this when you advise your clients?

We advise that they should remain long on all of those commodities until the middle of summer.

They are rising in concert with the current weather.

I could be underestimating or overestimating at this stage.

Coffee is interesting because that is really quite severe and up 44% last month.

So the market is pricing in -- in a month.

You could lose a large chunk of the brazilian crop due to weather.

Sweet, just about all of the -- wait -- wheat, just about all the commodities are facing weather conditions or lyrical tension.

So i started the year bowlers, political tension, and adverse weather patterns.

So i built my portfolio accordingly.

The last couple of years, we haven't seen that.

But this year, a could be similar to 2010 when you saw it up 30% to 40% because of bad weather.

The last time he saw a coffee like this was in the 1990's and in the 1980's. it happened before and it can happen again.

The data is already evolving.

So i would suggest net long across the complex.

Watch stocks because of volatility's. what is your largest waiting -- largest weighting?

Is it gold?

It is in the energy sector and then followed by gold.

So it is third or fourth in the weightings.

Uranium is the fuel of the future.

But the politics around that -- i need to go to uranium because we cannot sustain -- 100 million cars in the previous article, that is not counting the cars that are already on the road.

So demand for electrical cars and more fuel-efficient is coming.

So uranium is offsetting electricity.

But actual transportation logistics still require crude oil and hydrocarbons.

You mentioned gas.

A huge currency of choice in trading is gas.

Is that the hardest traded to figure out right now, the gasoline?

I don't think it's hard to figure out.

The rest of the world has reacted.

His next move will be to start cutting back gas.

So i think basically buying on the back of not enough coming through europe is worth the doing.

They will start to try to mid -- to imported from the middle

This text has been automatically generated. It may not be 100% accurate.

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