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          Speculative Influences on Commodity Futures Prices 2006-2008 (English)
          Discussion paper by Gilbert, Christopher L. / UNCTAD, 2010, 40 pages
          Categories: Commodities, International Financial System

          This paper examines the possible price impact of speculative bubbles and index-based investment activity on commodity futures prices over 2006–2008. Emphasis is put on crude oil, three nonferrous metals (aluminium, copper and nickel) and three agricultural commodities (wheat, corn and soybeans). There is significant evidence for periods of explosive bubble behaviour in the copper market where three separate bubbles are identified (plus a bubble in the soybeans market), whereas the evidence for bubble behaviour is weaker for crude oil and nickel. Aluminium, corn and wheat appear to have been bubble-free. The author also examines the effects of index-based investment on the same markets, and finds strong evidence that index-based investment did contribute to the rises in oil and metals prices over 2006–2008 but weaker evidence for similar effects on grains prices.

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