{"id":384165,"date":"2010-03-03T07:12:50","date_gmt":"2010-03-03T12:12:50","guid":{"rendered":"http:\/\/www.businessinsider.com\/broker-storage-investments-2010-3"},"modified":"2010-03-03T07:12:50","modified_gmt":"2010-03-03T12:12:50","slug":"goldman-sachs-and-jp-morgan-storage-investments-signal-a-commodities-slump","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/384165","title":{"rendered":"Goldman Sachs And JP Morgan Storage Investments Signal A Commodities Slump"},"content":{"rendered":"

\"Gold<\/p>\n

Being long commodities may all well and good, given China et al., but it usually pays to follow what brokers do, not what they say:<\/p>\n

Alphaville:<\/a><\/p>\n

As piles of base metals from aluminium to nickel build up due to poor demand, Goldman Sachs and JPMorgan have entered the little known but very profitable business of metal warehousing.<\/strong><\/p>\n

The deals reflect banks’ appetite for exposure to physical commodities beyond traditional commodities derivatives. Stockpiles at London Metal Exchange’s registered depots surge to an all-time high of 6m tonnes – up from 1m in 2007. Traders and bankers say warehousing is a classic “anti-cyclical” business as it flourishes when demand for metals is lackluster and stockpiles mount.<\/strong><\/p>\n

…<\/p>\n

The move follows on from Goldman Sachs, which last week bought Metro International, the operator of a global network of London Metal Exchange-approved warehouses, for a princely sum of $550m.<\/p>\n

Let’s just say there are many ways to make money off of commodities, for a range of market scenarios, rather than owning the physical assets.<\/p>\n

Join the conversation about this story »<\/a><\/p>\n

See Also:<\/b><\/p>\n