Become A Commodity Trader And Get Rich Like The Turtles

In the recent years, commodities as an asset class have received a lot of attention from the investor community. Many investors are now turning towards commodities as because they are disappointed with the return on other assets. The Reuters/Jefferies CRB Index, an index that tracks a basket of commodities nearly doubled in the last decade.

Commodities like gold, silver,oil, copper,uranium, wheat, cotton and other are experiencing an all time high historical prices. Gold prices recently breached the unheard of historical barrier of $1200 per troy ounce. Gold prices have retraced somewhat, but the market is poised for another rally in gold prices in the next few months. Other commodities are also experiencing a all time high demand. Crude oil is expected to reach close to $200 per barrel in the next few years with the global economy finally out of recession. What we are watching is a secular bull market in the commodities. This secular bull market may continue for many decades in 21st century. That is why it is being said that 21st century belongs to commodity trading. The fundamentals behind this secular bull market are strong.

The rally in the commodities market is going to last for many decades but this does not means that commodity prices will rise in a straight line. There will be minor downtrends, retracements, consolidation and accumulation as it happens in every market. But the overall trend will be up for a long time.

Now, let's discuss the fundamentals that are driving the boom in the commodity market. The population boom that started in the last half of the 20th century will continue in the 21st century. United Nations studies now report that the average number of years to add one billion new people to the global population will just decrease to 13 years in 21st century.

As the global population increases, so will the demand for natural resources. After all people need food to eat, houses to live in and heat to stay warm in their homes during the winters. All this requires raw materials.

People are moving towards cities. This is happening at a rapid pace in the developing countries. In the beginning of 20th century, only 15% of the global population used to live in cities. Now this figure has increased to around 50%. Cities in countries like China, India and Brazil are facing a lot of pressure from the rural migrationt that is taking place. Now this rapid urbanization puts a lot of pressure on natural resources as cities tend to consume a lot of natural resources.

Then there is rapid industrialization that is taking place in countries like Brazil, Russia, China and India which is putting a lot of pressure on the global supply of natural resources. As energy resources get depleted, more and more competition will develop between these countries to develop direct access to global energy markets.