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Three trades on oil, gold and agriculture

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If you'd been betting on ever-rising commodity prices, you could soon be counting your losses. Commodities as a whole, as measured by the Bloomberg Commodity Index, were up more than ten percent until the end of April and now it's fallen right back.  All the major futures contracts from crude oil to natural gas were sold. 

Brent crude, the global benchmark, dropped to a thirteen month low while WTI hit levels not seen since February. Sentiment has been hurt by the combination of subdued demand growth at a time of rising supply, not least from Libya. Ole suggests you could stay short for now but be aware that both crude oils have entered into oversold territory so if you're not involved right now, wait for a pullback. 

Soybean futures have fallen to their lowest levels since September 2009 as a big crop continues to get even bigger.  Ole says this crop is a good sell on any bounce or you could look at the relative trade to corn, which is stabilising. 

Gold has gained a little this week; it's regaining its safe-haven status, says Ole, as there's so much volatility in other commodities. It's also looking more attractive given major bond yields continue to fall to record levels and as inflation isn't much of an issue, the cost of holding gold declines.