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Have commodities become a basket case?

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The basket of 22 leading commodities has sunk to a 12-and-a-half year low this week. Saxo's Ole Hansen says this is an extension of what we've seen over the last few months as demand has not kept up with supply, the dollar has strengthened and China's growth has slowed.

Hansen says WTI crude fell to a six year low on Thursday before rebounding. Oversupply is still an issue. But on the supporting side, he says people are "playing the contango". He also points out that energy companies such as Shell and ConocoPhillips have announced swingeing cuts to capital spending.

Moving to metals and despite gold and silver's rally this year, both have taken a big hit this week. Hansen says that was inevitable once the 'event risks' such as the ECB's QE announcement and the Greek election were over. He also offers a trade tip on gold.