RealMoney Radio Recap: Commodity Conundrum

Commodities are not dead, said Aaron Task on Jim Cramer's "RealMoney" radio show Thursday. Task, co-executive editor of TheStreet.com, is filling in for Cramer this week.

Although there is a conundrum facing Wall Street, where people believe that the commodity game is over, this is not true, he said.

Commodity prices had rallied dramatically from the beginning of the year to mid-May, where gold was up 40%, silver had risen by 65%, copper more than doubled, and nickel and zinc had shot up 60% to 90%.

"These are huge moves on top of rallies we had already seen in the commodity space from 2000 to the end of 2005," Task said.

After the Fed's May 10 meeting, and the Bank of Japan started pulling liquidity out of the Japanese system, gold, copper and silver have experienced huge declines. Task said he believes that the long-term story for commodities remains intact.

The fundamental reason for a bull market in commodities is the global growth story, he said.

There is huge growth in China and India, where they are building infrastructure similar to that in the U.S. in 1950s. As people in the country migrate toward cities, there is a tremendous demand for commodities, said Task.

New-found wealth in these countries also affects commodities, as gold has a certain historical relevance there, especially in India.

"Every element of the commodities complex has broken through 20-year trading ranges," Task said. The last time commodities were hot was in the 1970s.

"The commodity rally is going to continue in the long term," Task said.