That commodity prices have fallen in recent months, while equity and bond markets continue to make gains, is somewhat puzzling, says UK-based Darwin Investment Managers in its latest “Perspectives” report.

Gold, copper, grain and oil prices have all been moving lower, and central bankers’ monetary easing efforts have not particularly benefited from commodity markets, said the firm. This may be because the dynamics surrounding commodities have changed, in part, as China’s growth has modified and talk of the “super-cycle” has tailed off.

While commodities are increasingly seen as reflecting economic reality, equities are perceived as more of a “hope play”, said the firm. If this be the case, then the most logical conclusion would be that higher equities are reflecting the wall of money that has been produced by central banks, while commodities are responding to the impact on the real economy which, so far, has been limited.

The established trend for some time has been that equity markets are reaching new highs and bond yields continue to move lower, with coordinated global monetary easing lying behind these moves. In the last week, there has been another round of interest rates cuts, including in Australia, India, South Korea and the eurozone.

The firm concluded that it does not hold a strong view on recovery, and instead remains biased towards real assets, with a preference for equity and property rather than commodities.