Now it's time to make a new prediction.
The run-up in commodities prices isn't going to end. But it is going to change. You see, commodities are going to break into two distinct groups: Traditional inflation hedges, such as gold, and big industrial commodities, such as coal. Going forward, the industrial path will be the one that investors will want to travel for maximum profit. Here's the No. 1 way to play what we're calling "the commodities boom of 2011."
With commodities such as silver and gold, the prices are based on speculative demand. During the current run-up, loose global monetary conditions and the fear of inflation have served as the catalyst for record prices. For the last two years, governments around the world have used monetary policy as a tool to prop up their economies after the financial crash. That has pushed up gold and silver prices: The increase in the yellow metal has been moderate, albeit steady, while silver has doubled in the last 18 months.
