Comment: Investor demand and spot commodity prices
AbstractTilton et al. claim in their article “Investor demand and spot commodity prices” to show that “investor demand can be pushing up a commodity's price even when investor stocks are falling.” In the present comment, it is argued that in both the cases described by Tilton et al., investors are supplying the market, putting physical material into it, rather than adding to demand. Thus, the reasoning by Tilton et al. is not concerned with the phenomenon referred to in the traditional theory, where, in the absence of changes in demand and supply fundamentals, prices rise as a result of increased investor demand for futures contracts.
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Bibliographic InfoArticle provided by Elsevier in its journal Resources Policy.
Volume (Year): 36 (2011)
Issue (Month): 4 ()
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Web page: http://www.elsevier.com/locate/inca/30467
Commodities; Speculation; Spot prices; Commodity stocks;
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- Tilton, John E. & Humphreys, David & Radetzki, Marian, 2012.
"Investor demand and spot commodity prices: Reply,"
Elsevier, vol. 37(3), pages 397-399.
- Tilton, John E. & Humphreys, David & Radetzki, Marian, 2012. "Investor demand and spot commodity prices: Reply 2," Resources Policy, Elsevier, vol. 37(3), pages 403-404.
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