Kevin Ferry says investors should place their money in coffee, CNBC reported.
Ferry, the co-founder of Cronus Futures Management, said the current “hot money” is heading for coffee and avoiding commodities such as oil and gold.
Coffee is a good commodity to invest in and is popular among investors since it is “the second largest commodity traded in the world,” beating out steel, Ferry said.
He said that trading in coffee right now is already up 4% compared with the previous week.
Ferry believes that the dollar will hold its own weight if the Federal Reserve keeps its “patience” in regards to the interest rate policy.
Gold has fallen quickly since last week’s high of $1,227.50. Prices dipped by 8.7 percent to $1,120.90 an ounce, the Associated Press reported.
Other commodities such as silver, platinum and palladium have also taken hits of 2 to 3 percent.
Some experts said the pullback from investors will not last.
"Things had gotten a little out of hand on the upside," said Caesar Bryan, portfolio manager of the GAMCO gold fund, the AP reported.
Bryan said prices for gold will go higher since the Fed will not raise interest rates, preventing the dollar from getting stronger, Bryan said.
Lee Eung Baek, head of reserve management at the Bank of Korea, has said gold is being seen as an “illusion,” Bloomberg reported.
Other investors are not staying away from buying gold.
“There’s some buying on weakness in gold and oil so far,” said Ben Westmore, a commodities analyst with National Australia Bank in Sydney. “We’ve seen quite thin trading in commodities markets. Some investors are still optimistic about the global recovery and willing to buy on weakness.”
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