ABSTRACT
It is usual for ‘serious’ studies of commodity markets to ignore technical analysis and trading strategies on the grounds that most commodity markets studied are adequately described as efficient markets. This description implies that in the market concerned all the information available about that commodity at any given moment is discounted into the market price, that is, at any moment the commodity is priced fairly with respect to its value. Changes in price will accordingly reflect the continuous supply of new information and the revision of old information. In an efficient market it is not possible to use the information currently available to produce expectations of future outcomes that are better than market based expectations. This is because in an efficient market successive price changes are independent and as a consequence, it is extremely difficult if not impossible for trading strategies to be devised that are able to increase returns above the market determined returns.
