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How to cash in on the international supply crisis

Demand for oil, copper and other commodities is growing — could this help investors to beat the pressures of inflation

David Brenchley, Saturday October 02 2021, 12.01am, The Times

The prices of lithium, aluminium and copper are soaring, wholesale gas prices have jumped sixfold and the oil price has hit a three-year high.

All of these movements are ominous for consumers…

If commodities rise, so do consumer prices. Oil in particular is a large contributor to the inflation figures you see in newspapers: it is 3.2 per cent in the UK, the highest since 2012…

Could investing in commodities help you to combat these inflationary pressures and cushion your portfolio from the fallout from the pandemic?

Is it boom time?
After a post-pandemic bounce that pushed Brent crude, the global benchmark oil price, to trade above $80, up from below $20 in April 2020, some analysts predicted what they call a commodities supercycle…

..Many analysts believe that the multi-trillion dollar stimuli that have been announced in the US and Europe to lead a green infrastructure revolution will send prices even higher.

How to invest
Even if you do not believe the hype about supercycles, you may still want to take advantage of leaping prices for essential materials, particularly given the threat that rising inflation poses to your savings pots…

Investment trusts can provide access to mining company shares, as well as allowing you to invest in renewable energy such as solar and wind farms. These trusts can also be volatile, but not as much as owning individual stocks…

Nuclear power will play a key role in the global move towards net zero carbon emissions, said Matthew Read at QuotedData, a research firm. This has pushed the uranium price up.

Read said that Geiger Counter Investment Trust, which has gone up 163 per cent in the past 12 months may be volatile but the small uranium miners it invests in should continue to benefit.

Read more here

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