Attendance at the Commodities Week MENA event was down by around 30 per cent on last year, although three Canadian listed junior gold exploration companies visited Dubai for the first time this week, and the general mood of participants appeared to be bullish, at least in the medium to long term.
However, with the price of oil, gold and silver down significantly since summer last year, it is perhaps to be expected that the enthusiasm of investors is beginning to wane, and some of the arguments trotted out by the true believers are wearing a bit thin.
Legendary gold bug James Turk of GoldMoney.com pointed to recent weakness in the gold price as a buying opportunity with the US dollar still heading down with no affirmative action from the authorities to prevent a further decline. And he was even more bullish on the outlook for silver.
Meanwhile, Casey Research chief economist Bud Conrad laid out the case for Peak Oil in a compelling presentation, and highlighted the recent revision of proven reserves by Kuwait as proof that Opec oil reserves had been overstated for many years.
However, his conclusions still left a wide range of possible dates for an oil supply crunch and there was nothing new in this analysis. Indeed, his brief review of the outlook for agricultural or soft commodities was more compelling with global warming beginning to seriously impact production at a time of rising demand.
On the conference fringes it was interesting to note two stands from junior gold exploration companies, Majestic Gold Corporation and YGC Resources which is in the process of merging with a gold producer. These companies are both listed in Canada and a third junior, War Eagle Mining Company was also attending the event to look for potential Middle East investors.
It is these smaller gold companies that will arguably provide the best leverage against a rising gold price, much in the way that dot-com stocks led the Tech boom of the late 1990s. The Vancouver stock market lists more than a thousand such stocks, most of which have yet to benefit significantly from the rising gold price of the past few years.
One conference speaker panel chewed over the use of Exchange Traded Funds, for investing in gold and silver. And Colin Griffiths of the Dubai Gold and Commodities Exchange felt that gold was sufficiently liquid for the ETF to function while the 'jury was still out' on silver. But James Turk disliked the failure of ETFs to guarantee their holdings to investors.
An afternoon panel session specifically on gold and precious metals saw members point to the enormous interest by hedge funds in commodities these days, and a greatly increased allocation of capital from these funds. But that might be seen as a negative as well as a positive because hedge funds are perhaps the most fickle investors in the capital markets today.
It could be that the correction in many commodities that started last summer has further to run and that a better entry point for investment is around the corner. Yet the long term bull market for commodities looks intact and sizing up opportunities now could be time well spent.