Sunday, March 20, 2011

What is the CRB Index

In tracking the increase in commodities one of the best indexes is the CRB index. So what is the CRB index, it is also called the Thomson Reuters/Jefferies CRB Index (TR/J CRB) which is a commodity index of unweighted geometric average of some important commodities. It averages prices across 17 commodities and across time. The index tracks energy, grains, industrials, livestock, precious metals, and agriculturals.

The latest weighting are listed below
EnergyCrude Oil, Heating Oil,
Natural Gas
GrainsWheat, Corn, Soybeans17.6%
IndustrialsCopper, Cotton11.8%
MeatsLive Cattle, Lean Hogs11.8%
SoftsCoffee, Cocoa, Sugar
Orange Juice
Gold, Silver, Platinum17.6%

Below is a chart comparing of gold prices to CRB index and really shows why gold is not overvalued.


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