Investor demand and spot commodity prices

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dc.contributor.authorTilton, John E.
dc.contributor.authorHumphreys, David
dc.contributor.authorRadetzki, Marian
dc.date.accessioned2024-01-10T12:39:53Z
dc.date.available2024-01-10T12:39:53Z
dc.date.issued2011
dc.description.abstractThe on-going debate over the influence of investor demand on spot commodity prices largely attempts to assess this influence by measuring the growth in investor demand in recent years. Given the serious data problems that plague such analyses, this article pursues another approach in the hope of providing useful insights into the impact of investor demand on spot commodity prices. It focuses on the mechanisms by which investor demand affects spot prices, and in particular on two questions. First, how does an increase in investor demand on the futures markets affect the spot market and spot price? Second, when investor demand is increasing and pushing a commodity's price up, do physical stocks of the commodity also have to be rising, as economists and others widely assume?
dc.description.abstractOn the first question, the article concludes that a surge in investor demand raising prices on the futures markets will have a direct and comparable effect on the spot market prices when these markets are in strong contango. However, when markets are in weak contango or backwardation, price movements in the futures markets have a much looser effect on spot prices. As a result, changes in investor demand on the futures markets may have little or no influence on spot prices in the absence of a strong contango. Instead, changes in fundamentals (that is, producer supply and consumer demand) and possibly changes in investor demand taking place directly on the spot market largely determine the spot price at such times.
dc.description.abstractOn the second question, the article shows that investor demand can be pushing up a commodity's price even when investor stocks are falling, despite the widespread presumption to the contrary. (C) 2011 Elsevier Ltd. All rights reserved.
dc.fechaingreso.objetodigital09-04-2024
dc.format.extent9 páginas
dc.fuente.origenWOS
dc.identifier.doi10.1016/j.resourpol.2011.01.006
dc.identifier.eissn1873-7641
dc.identifier.issn0301-4207
dc.identifier.urihttps://doi.org/10.1016/j.resourpol.2011.01.006
dc.identifier.urihttps://repositorio.uc.cl/handle/11534/77246
dc.identifier.wosidWOS:000294942700001
dc.information.autorucIngeniería;Tilton J;S/I;1002636
dc.issue.numero3
dc.language.isoen
dc.nota.accesoContenido parcial
dc.pagina.final195
dc.pagina.inicio187
dc.publisherELSEVIER SCI LTD
dc.revistaRESOURCES POLICY
dc.rightsacceso restringido
dc.subjectCommodity prices
dc.subjectInvestor demand and stocks
dc.subjectSpeculation
dc.subjectStrong and weak contango
dc.subjectSpot and futures markets
dc.subjectCopper
dc.subject.ods08 Decent Work and Economic Growth
dc.subject.odspa08 Trabajo decente y crecimiento económico
dc.titleInvestor demand and spot commodity prices
dc.typeartículo
dc.volumen36
sipa.codpersvinculados1002636
sipa.indexWOS
sipa.indexScopus
sipa.trazabilidadCarga SIPA;09-01-2024
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