At present, there is a lot of noise about a "commodities bubble." The
majority of "experts" are convinced that commodity prices have risen too
much and they'll collapse. On the other hand, stocks and bonds are being
touted as bargains - or as the foolproof road to riches and financial
freedom! These days, the mainstream media is awash with analysts who are
claiming that commodities will suffer due to rising interest rates.
Frankly, I find their argument totally absurd.
History has shown that commodity prices are positively correlated to the
direction of interest rates. On the other hand, financial assets such as
stocks and bonds are negatively correlated to interest rates.