Rush to commodities not over, analysts say

NEW YORK, March 7 (UPI) -- Investors have turned from risky securities in recent months literally to bread and butter investments, namely raw commodities, such as metals, grains and oil.

But, analysts wonder when the bubble will burst. The run on commodities in world markets is probably not over, analysts told Friday's Science Christian Monitor.

Gold is nearing $1,000 an ounce. Wheat and corn prices surged in February. Oil prices have gone from under $70 a barrel to more than $100 a barrel in the past year on rising demand from emerging markets.

With the U.S. dollar weak, the financial markets foundering on a prolonged housing slump and a recession likely, many analysts conclude the commodities run will continue, the newspaper said.

"This is often the environment when investors turn to commodities," Paul Kasriel, an economist at the Northern Trust Co. in Chicago told the Monitor. "I'm not that surprised about gold."

"In any of these (booms) there's always a kernel of truth to them – maybe a whole ear," said economist Gary Shilling. "What you do know is that when the speculation starts, it does reinforce itself," he said.