Barclay’s Bank: Hedge for Oil Crisis – Go Long Gold – Short Aluminum & Cotton

Posted by Barclay's Capital

Share on Facebook

Tweet on Twitter



For oil, the investors should guard against potential geopolitical flare-ups in the Middle East which could push up prices. “We recommend buying a bullish play, suggesting buying out-of-the-money calls at $125 a barrel or higher,” 

LONDON (Commodity Online): British bank Barclays Capital recommends buying March gold futures as precious metals receive support from a third round of quantitative easing.

“With the dollar weakening and debates over inflation and fiat currency debasement now likely to move back to center stage, QE3 is likely to support the recent pickup in physical and futures market buying, which should help to bring to end gold’s position as one of the weakest commodity markets in 2012,” the bank added.

According to Barclays, the base metals have benefited from QE3, but the outlook for sluggish economic growth will hurt demand for base metals and the firm recommends shorting selective metals, including aluminum.

Cotton prices have bearish fundamentals and likely lackluster demand if the global economy deteriorates and the bank recommend shorting the fiber.