The on-going debate over the influence of investor demand on spot commodity prices largely attempts to assess this influence by measuring the growth in investor demand in recent years. Given the serious data problems that plague such analyses, this article pursues another approach in the hope of...

In a recent article (Tilton et al., 2011), we argue that even when investor stocks are declining an increase in investor demand can cause a commodity's price to rise, a conclusion that is both contrary to conventional wisdom and counter-intuitive. In his comment on our article, Olle Östensson...

This, our second reply to Östensson, supplements our earlier more technical analysis with a simple intuitive explanation of how investor demand can be driving commodity prices higher even when investor stocks are falling.

The commodity price boom that emerged in 2004 has proved far more persevering than its predecessors of 1950 and 1973. Some analysts have suggested that it may represent the start of a "supercycle" caused by the voracious raw materials demand from China and other emerging economies, with prices...