Precious Metals, Grains Expected to Be Hot Plays
The hot plays in futures markets in the second half of this year will be metals for the bulls and grains and soybeans for the bears, analysts and traders say.</br></br>Among the top performers in the first six months were futures linked to surging stocks and the dollar, while traditional commodities showed few or no signs of life. Prices as reflected in the Commodity Research Bureau's futures index drifted to their lowest level since 1987, and trading volume in agricultural, metal and energy commodities declined in the first half from a year earlier.</br></br>But action may pick up in the pits if, as some traders predict, bull markets develop in precious and base metals, whose fortunes are expected to improve as the U.S. economy recovers. Futures traders also can make money by betting on price declines, and the bear market in grains and soybeans heads the list of these "short" strategies.</br></br>Currencies will remain a hot play, traders and analysts predict. And market players will be watching for opportunities to trade on movements in interest rate futures and options as the economy struggles to shake off the recession.</br></br>Action -- either up or down -- is what makes money for speculators in futures. Dull markets are more than just boring; becalmed prices cost traders money. Livestock, coffee, and cocoa are expected to be sleepy for the rest of the year. And, after an active first half, stock-index futures will quiet down in the second half, say analysts who believe the stock market already has made its major gains for the year.