By Rudi Filapek-Vandyck of FN Arena

Don"t get confused by commentators calling for the end of the resources boom era, if anything the underlying trend for metals and other commodities is only getting stronger and stronger, commodity specialists at Barclays Capital state in their latest update on matters.

Barclays' team of economists has just increased its growth forecast for China this year to 10% from 9.4% previously. It is probably unnecessary to add this should be an unquestionable positive for natural resources.

In addition, Barclays has raised global economic growth forecast to 5% from 4.7% previously, noting demand for commodities is again accelerating in many sectors.

With regards to creeping up global interest rates and their expected negative effect on economic growth and thus on demand and prices of commodities, Barclays points out that history shows otherwise.

Traditionally, the analysts say, commodity cycles only tend to reach their highs until at, or even just after, the peak in the interest rates cycle. With market expectations of at least one, possibly two more rate hikes in the US, we have yet to see the peak in the cycle. Barclays analysts believe it is thus "not unreasonable" to expect there is further upside to come.

The commodity specialists have made another observation that supports their view. The recent correction (or the current one, whatever you want to call it) has seen those commodities with the least fundamental market support (and probably the highest speculative interest) to fall the hardest. Think gold. Think silver.

The decline in metals with strong fundamental support such as copper and zinc has been what Barclays describes as "more orderly". In energy markets oil has not even broken below its recent trading range and neither has US natural gas, the analysts note.

This observation is seen as supportive for the Barclays view the recent events look simply like a "healthy market correction". The analysts continue to see fundamentally driven upside to oil and industrial metals prices in the months ahead.

Copyright FN Arena/The ASIA Miner