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Major changes in global growth are bullish for commodities, says CEO VanEck




Major changes in global growth are bullish for commodities, says CEO VanEck

New money only follows part of the commodity rally

Investors should consider commodities because of a “major change” that comes with international expansion, said VanEck CEO Jan van Eck.

“The global economy started growing again,” Van Eck told CNBC’s “ETF Edge” this week.

He points to China, the world’s second-largest economy after the US, as a key driver of the expansion.

“China has been such a huge growth engine over the past two years and so negative for growth. The manufacturing PMI has now been positive in China since March,” Van Eck said. “You have growth now. … So that leads to your reflation trade.”

His company has exposure to commodities from gold to energy and copper. The exchange traded funds include the VanEck Gold Miners ETF (GDX) And VanEck Oil Refiners ETF (CRAK). They are up 10% and 9% respectively year to date.

Van Eck highlights buyer‘s momentum as a positive sign for demand. The industrial metal is up nearly 16% this year, as of Friday’s close.

‘It is a good measure of global economic growth and energy prices. [They] They’re probably a little bit ahead of themselves, but they reflect that the world is growing,” he said.

He also sees US government spending as a bullish catalyst for commodities trading.

“Budget expenditure is so high,” said Van Eck. “That also leads to this global growth trade. That’s why I like commodities, because I think it’s more than just a headline.”

From Friday the S&P GSCI Index spotfrom which raw materials are tracked Crude oil Unpleasant cacaois up 10% so far this year.

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