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Private Briefingwith WILLIAM PATALON III, Executive Editor
Aside from the continued sell-off in U.S. tech stocks, one of yesterday’s top financial news stories was the fact that U.S. inflation is accelerating – and at a pace that’s exceeding forecasts.
And the surge in food prices is one of the big catalysts…
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Gold and silver are in the midst of an ugly selloff, but the best performing commodity of 2013 continues to ramp up.
Believe it or not, it's natural gas.
After increasing 1.2% Wednesday, natural gas prices now stand around $4.20/mmbtu- up more than 120% from a year ago and almost 30% this year alone.
By comparison, gold prices are down 18% and silver prices are off over 23% since the beginning of 2013.
The good news for natural gas investors is that there are still plenty of reasons why natural gas will continue its recent run.
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For one thing, unlike gold and silver which for the past ten years have been on historic bull runs, natural gas is in the early stages of rebounding from a massive decline. Natural gas prices fell from over $13 in the summer of 2008 to under $2 last April before starting to bottom.
But price patterns alone won't help you truly understand where natural gas is headed.
Instead, the key to knowing where natural gas prices are going revolves around demand.
In fact, Money Morning Global Energy Strategist Dr. Kent Moors says there are five reasons why natural gas prices will continue to rise, reaching $4.35 by this summer and hitting $4.85-$5.15 by the end of 2014.
According to Moors, natural gas prices had been largely dependent upon how cold winters were and how hot summers were. But that's not necessarily the case today.
Those influences still exist, Moors says, but that there are other more important determining factors today.
First, widespread industrial use of natural gas has finally returned and now exceeds pre-crisis levels. Moors says this is always the last of the main traditional demand areas to return after a recession.
Second, is that natural gas continues to replace oil as a feeder stock for petrochemicals - from ingredients used in the production of plastics to fertilizers and broadly used chemicals.
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