| Fundamental Analysis
involves evaluating the supply of and demand for the actual
commodity, on the premise that a short supply or high demand
will cause prices to rise, and vice versa.
Every significant commodity price
move in the history of futures trading has been rooted in the
fundamental factors. Unless there is a true shortage or
surplus of the actual commodity, unusually low or high prices
cannot be maintained.
The fundamental analyst tries to
estimate how much of the commodity will be around in coming
months and how much demand there will be for it. |
