Well we have certainly started the year badly problems in China are coming to the fore, the US stock market down 6% and many European stock markets have had a terrible start to the year. This should not come as a surprise to readers of this blog. 

So it seems like there's gloom and doom everywhere. But I do think that the commodity rout is getting closer to a grand finale. The reason is that prices are now so depressed that there are closures going on and many producers are struggling to make a profit or operating at losses. But there comes a point when prices are so low that they will actually rise as producers either exit the industry or temporarily refuse to produce at the low prices.

So don't listen to all the commodity pessimists, now is not such a bad time to  start building long positions in commodities. I expect some stabilization around present levels before they start rising again. Remember the trick is to buy low and sell high. Below is a graphic of the Goldman Sachs Commodity Price Index showing how prices have more than halved since mid 2014.