Second, investment in commodities is concentrated in the futures market, and its impact on spot prices is mainly indirect (i.e. through arbitrage). 9 While futures prices might therefore be expected to rise as investor interest grows, the reverse has been observed – with spot prices staying higher than futures prices.
Third, if speculators were pushing prices above their fundamental levels, one would expect to see inventory levels rising, reflecting unwanted output. This has not been the case, however. In most instances inventory levels have been falling as prices have been rising, suggesting excess real demand.