Merrill: Commodity Price Surge Is Largely Speculation

Not doubt about it: Prices of oil and gold -- and copper and other commodities -- have shot up in recent days. But David A. Rosenberg, North American economist at Merrill Lynch & Co., New York, believes the prices are more speculative than real.

"Concerns over Iran's nuclear ambitions are probably not a sound fundamental reason for buying commodities, and, even if at the margin these concerns may have boosted the prices of oil and gold, they hardly affect copper, silver, zinc and aluminum," say says in Merrill's latest weekly analysis for investors.

"Moreover, you know that you must be nearing a peak from a purely capitalization standpoint when, in just one week, you hear one pundit calling for $6,000/oz on gold and [a] $100/bbl forecast on oil is back on the table," says Rosenberg.

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