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Winning Commodity Plays in 2010: Market Pros

When investors talk about commodities, gold and oil are the first ones that come to mind. But are they the commodities you should be looking at now? Frank Holmes, chief executive and chief investment officer of US Global Investors, and Mark Hansen, director of trading at CPM Group, shared their insights.

Gold "is in a sector bull market,” Holmes told CNBC. “When gold became free trading, China and India had no global footprint, they were only 1 percent global GDP. Now they’re pushing 12 percent, but they’re 38 percent of the global population—and they have a natural affinity towards gold.”

Winning Commodity Plays

Holmes expects the next hot trends in the commodities sector to be lithium, uranium and natural gas.

“There’s a lot of interest for lithium batteries and I think there’s major car companies and battery companies that are looking for deposits,” he said.

“This time last year the worst performing was lead, and this year lead was one of the best performing commodities—so it’s important to take a look at the bottom and scraping along the bottom, uranium looks attractive."

"And [natural] gas," Holmes added.

In the meantime, Hansen said although there is no reason for investment demand for gold to change, he is in favor of the agricultural commodities.

“I see opportunity in corn, wheat and soybeans because the agricultural commodities have been overlooked this year,” he said.

“So investors have focused on precious metals and energy, but the major agricultural markets which are very important for day to day use have not participated because investors overlooked them. So we may see some improvement in the ag markets which have been overlooked.”

However, Hansen said sugar as a commodity play "had its story."

"We might see prices move a little higher, but after it’s nearly more than doubled this year, that’s a sign that that market’s had its course," he said.

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No immediate information was available for Hansen or Holmes.