Barclays analysis says precious metals may handle downturn best

Gold, silver, platinum and palladium, as well as other commodities, generally stand a better chance of handling a global economic downturn than other types of investments, Barclays Capital said Monday.

While the investment house does not expect a repeat of 2008, it says commodities “are on a very different footing” from two years ago primarily because commodities prices are falling this year from a much lower base than they were falling in 2008 – from their June 2008 peak they fell 54% to February 2009.

“Our results suggest that those commodities that market participants are likely to view as most exposed to a recession are livestock, gasoil and KBOT wheat, while platinum, cotton, lead, carbon and cocoa are likely to be viewed as more “protected,” the Barclays note said.

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