investors remain bullish on commodities that beat stocks and bonds for a second year

At one point in regard to money managers "have ranged from government stimulus file and the possibility of a new recession, investors remain bullish on commodities that beat stocks and bonds for a second year.

Measurement of Standard & Poor's GSCI advanced 20 percent more than the 9.1 percent gain in the MSCI World Index of shares and 5.3 percent return at a rate of Bank of America Merrill Lynch bond Treasury. Currency traders are betting on a stronger dollar, sending a signal to the contrary, because the products are moved in a direction opposite to the currency in 16 of the last 20 quarters, according to data compiled by Bloomberg.

Silver, an investment and industrial equipment, jump as much as 37 percent next year, leading gains in the 15 products in a Bloomberg survey of over 100 analysts, traders and investors. Zinc, metal worst performer this year, is seen by 21 percent. Arabica coffee, which reached 13 years last week, will be the weakest performer, adding no more than 7 percent.

The strength of demand "was a surprise considering that just out of the worst recession since the 1930 massacre and the most active classes", based in London Roxana Mohammadian-Molina, one of a team 18 Barclays Capital analysts who correctly called the bottom of oil and copper last year, said by telephone on December 22. The bank said that the U.S. natural gas will be the only one of the 25 prices of commodities it follows that an average of less next year.

Shares Short

Global stocks are still near record $ 11 trillion 62.6 trillion U.S. dollars of market capitalization reached in October 2007, data compiled by Bloomberg. During the same period, assets under management of commodities increased about 80 percent to 354 billion U.S. dollars, and attract a total of $ 60 billion in new money this year, the second largest after 2009, estimates Barclays.

The S & P GSCI Index to extend last year's 50 percent advance, which also exceeded 27 percent jump in the MSCI World Index and the loss of 3.7 percent for Treasuries.

Investors favored commodities this year as China, the largest user of everything from coal to iron ore to zinc led to the recovery of the first global recession since the Second World War. The savings and expansion, competition for raw materials is increasing.

U.S. growth will rise to 3.25 percent in the fourth quarter of 2011 from 2.5 percent in the first, according to the average estimate of up to 66 economists surveyed by Bloomberg. China will slow to 9 percent next year from 10 percent in 2010, is still three times the U.S. rate and six times the speed of the euro area, polls show. China on Dec. 26 raised interest rates to counter inflation.

Goldman Picks

Commodities will be earning more than those in China is at least self-sufficient and less spare production capacity, according to analysts at Goldman Sachs Group Inc., led by London-based Jeffrey Currie. Oil, copper, cotton, soybeans and platinum are top picks of the bank.

Goldman forecast on 13 December, an increase of 18 percent of raw materials in 12 months, led by an increase of 28 percent in precious metals. This is consistent with the results of the Bloomberg survey.

Silver, precious metal commonly used in industry, rose 37 percent to a maximum of $ 40 an ounce next year from $ 29.1238 per ounce in trading in London on December 24, the survey shows. Palladium used in catalytic converters for cars, jump as much as 18 percent to $ 900 an ounce from $ 764 in operations in London on December 24.

Silver futures for March delivery rose 53 cents, or 1.8 percent, to $ 29,785 an ounce at 10:14 am on the Comex in New York. Palladium futures for March delivery gained $ 11.90, or 1.6 percent, to $ 779 an ounce on the New York Mercantile Exchange.

London markets are closed today for the second day of the holidays.

Gold Outlook

"Investors will be cycling gold and silver, platinum and palladium, if the financial and economic conditions improve," said Jeffrey Christian, managing director of CPM Group, a research company in New York.

Christian correctly predicted in January that gold could reach $ 1.400 an ounce this year and is now price forecast to peak at $ 1550 in the first quarter before falling as low as $ 1,200. The median forecast in the Bloomberg survey is for a gain of 23 percent to a maximum of $ 1,700. Gold reached a record $ 1431.25 on December 7 in London to close at $ 1381.47 on December 24.

Gold futures for February delivery rose $ 18.70 or 1.4 percent, to $ 1,401.60 in the Comex.

The popularity of the precious metals, suggests that investors are seeking assurances that governments and central banks to inject money into the economies to sustain the recovery.

The Federal Reserve has kept its benchmark interest rate near zero since December 2008 and plans to inject 600 billion U.S. dollars in June the economy by purchasing bonds through the so-called quantitative easing. Already bought 1.7 trillion U.S. dollars of securities in a first phase that ended in March.

"Concern" fiscal

"I like gold because I worry that our fiscal and monetary policies make no sense," said David Einhorn, president of Greenlight Capital Inc., which manages about $ 6.8 billion of assets, in an interview in New York. "It potentially leads to a greater risk of further instability."

Investors increased their holdings of precious metals by 22 percent to a record 17,390 metric tons in the 10 months to 17 December, according to data compiled by Bloomberg. That is worth about 111 billion U.S. dollars, of which 84 percent is 13 percent gold and silver, and the rest of platinum and palladium.

GSCI Returns

Returns for investors in commodities may be less than the spot rate suggests. The S & P GSCI Total Return, monitoring the net amount received, up 8.4 percent this year, reflecting the cost to maintain positions in futures markets. When longer-dated contracts cost more than the immediate delivery, a market structure known as contango, investors pay a premium to keep their farms as positions expire.

The commodity gains can evaporate if currency traders betting that the dollar will strengthen right.

Contracts dollar appreciation against the euro are at a maximum of three months and the U.S. Dollar Index against six counterparts gauge rose 6 percent from 4 November. The inverse relationship between foreign exchange and commodities last month reached the highest level in over a year, according to data compiled by Bloomberg.

commodity experts surveyed by Bloomberg are betting this time will be different in the middle of the growing demand and dwindling stocks.

Copper deficiency

copper use will outpace supply by 825,000 tons next year, more than double the inventory in LME warehouses-up, according to Barclays Capital. The prices reached a record $ 9,392 a tonne on December 21 in London will rise to $ 10,475 next year, the Bloomberg survey. Zinc is the best performing industrial metal, advancing as much as 21 percent to $ 2,800 a tonne from $ 2,308 in London on 24 December.

Copper futures for March delivery rose 2.25 cents, or 0.5 percent, to $ 4.3025 a pound on the Comex. Earlier, the metal rose to a record high of $ 4.3195.

The demand may also come from new products listed. ETF Securities Ltd. began offering investors PTE supported by copper, tin and nickel from this month, attracting about $ 25 million to date. JPMorgan Chase & Co., BlackRock Inc. and Credit Suisse Group AG plan similar products.

Weather markets

A stronger dollar can also be overcome by the weather on agricultural markets. Wheat as much as doubled since June and corn rose 83 percent as the worst drought in Russia in less than half a century, floods in Canada and the parched crop Kazakhstan and Europe in ruins.

While wheat is expected to increase to 17 percent, to $ 9.13 a bushel next year of $ 7.83 in Chicago on December 23 and maize by 14 percent to $ 7 a bushel to $ 6.14, the Coffee was chosen as probably the worst performer in the Bloomberg survey. Analysts see an increase of no more than 7 percent to $ 2.53 a pound from $ 2.359 a pound in New York on 23 December.

Wheat futures for March delivery rose 8.5 cents, or 1.1 percent, to $ 7.8875 a bushel today on the Chicago Board of Trade. Corn futures for March delivery rose 3.5 cents, or 0.6 percent, to $ 6.1875 a bushel, the profit straight session. The Arab-coffee futures for March delivery rose 1.05 cents, or 0.4 percent, to $ 2.385 a pound on ICE Futures U.S. in New York.

"We see no imminent threat to the commodity prices in 2011," said Evan Smith, who helps manage U.S. $ 900 000 000 Global Investors Inc. in San Antonio. "You still have the concern for monetary stability in emerging economies is not the wealth effect is driving the demand."