Managing Commodity Price Risk
by George A. Zsidisin, Janet L. Hartley, Barbara Gaudenzi, Lutz Kaufmann
Forecasting Long-Term Commodity Prices
When long-term forecasts are needed, technical analysis methods based on price patterns alone are not adequate. This is because, in the long run, too many factors impact the price of the commodity, thereby changing its pattern. Further, you cannot depend on historical pricing patterns to continue far into the future because the factors affecting the value of the commodity can quickly change. Instead, forecasters examine the underlying factors affecting supply and demand and use their judgment to forecast price. This approach is called fundamental analysis.
In this chapter, we explain how to develop long-term forecasts for different types of commodities using fundamental analysis. In fundamental ...
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