Commodity prices set to increase

There are signs that a whole host of commodity prices around the world, such as gold and copper, are set to push further ahead amid speculation that US authorities are on the verge of announcing a number of fiscal stimulus programs. It is believed that the weakness in the US economy could see the US Federal reserve announce plans to buy more government debt in the short to medium term to support the economy.

We have seen a massive increase in the price of gold and other commodities over the last few months with investors looking for "safe havens" in these troubled times. Despite the fact that some commodity prices have pushed well beyond what many believe are fair value levels there is still significant demand for the likes of gold and copper in the short to medium term.

Other commodities such as wheat have also pushed higher in the short term with supply issues affecting the worldwide market. It seems as though investors are looking everywhere but traditional stock markets and debt markets for their "safe havens" as many expect the worldwide economy, and major local economies, to experience a difficult end to 2010 and an uncertain 2011.