The commodity markets may have seen some recovery in the last year after an extended slump since the summer of 2014, but further gains may be capped, a fund manager said Thursday.
"That has caught some people off-guard, but it's not surprising if you look at major trends in the last decades...We often get a really sharp rally and a major trend that sells off, and then you get a bounce. We've just seen that in resources," said Mark Burgess, chairman of Yarra Capital Management.
He was commenting on the rally in Australian resources stocks on the sidelines of the Credit Suisse Global Megatrends Conference in Singapore.
"We think that now goes into a trading range again. If anything, it's probably overpriced here," Burgess added.
"We'll be a little cautious on (resources); they've had their bounce, they've had their recovery. The industry still needs to go through a supply-demand shakeup," Burgess said.