Some experts, such as investor Jim Rogers, say commodities are off to the races.
New York University economist Nouriel Roubini begs to differ.
He says the recent rally that has taken oil to an eight-month high of $73 a barrel and gold to $935 an ounce has gone too far.
The oil price gain is "too high too soon," Roubini told the Reuters Investment Outlook Summit in New York.
And if speculators insist on pushing the price toward $100, the move would create an "economic shock" just like last year’s spike to $147, he says.
That jump added to worries about recession, which ultimately sent the price back down below $40.
Roubini stresses that the economy continues to face deflationary risks. The consumer price index dropped 1.3 percent in the year through May, the largest drop in 59 years.
"For the next two years, deflationary pressure is going to be dominant,” Roubini says. “It is going to become a time bomb down the line if and when we keep monetizing large deficits.”
“It may be too soon to hedge with gold," he says. "Unless we have high inflation, or ... other risks like depression, gold looks toppy."
A few economists say price levels are just about right.
Millan Mulraine of TD Securities, tells The Wall Street Journal that the latest consumer price report “provides further evidence to dispel the growing concerns” about inflation.
“We are equally skeptical that prices will enter a deflation spiral,” he says.
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