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Hansen: Don't blame China for every commodity's problem

The Chinese dragon has been mostly to blame for this week's volatility in commodities. But Saxo's Ole Hansen says there are other reasons why crude oil and gold are not performing as well as they should.

The rig count rise and increasing inventories in the US started the slide in WTI, notes Ole. OPEC is still producing at the highest rate since 2012. Plus if the Iranian nuclear negotiations lead to a deal, additional supplies of crude could be added to the market, he says.

Although gold is considered a safe haven, the precious metal has not benefited from this week's volatility. Investors have either been shorting or getting out of gold altogether.

The only sector to have made gains this month is agriculture. Hansen notes that corn, wheat and soybeans have rallied more than 10% over the last month, mostly due to deteriorating weather prospects. Later this Friday the World Agricultural Supply and Demand report (WASDE) is out and Ole says it could show that corn stocks are down 12% while soybeans are down 20%.

03:17 minutes
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