Inflationary impact on resources market
The resource sector continues to be under pressure despite the raging bull market in the US.
Unfortunately the currently tepid recovery in the US. economy, as a serviced based economy, is not strong enough to lift metals prices, which are being hampered by weaker Chinese economic growth and investment demand as well as high inventory levels.
At some point can see the potential for all the monetary stimulus that the US Federal Reserve has been feeding the market will result in an inflationary spiral, in which case hard assets would return to favor. Otherwise global economic growth could rebound on its own right without the need for stimulus, boosting the demand for metals.
Click here to read the full update by Ascenta Asset management’s Rodney Stevens.
