When I last profiled gold and silver on 7 September. I noted how they were both poised to break through their yearly highs after a brief pullback. They certainly havent disappointed.

Gold has regained the elusive $1,000 per ounce area and has motored to all-time highs. With rumours swirling about the eventual demise of the US dollar (due to the increasing debt load), gold could become the currency of choice. In fact, some analysts say it could shoot to $2,000 per ounce.

Silver set to follow gold to all-time highs

Meantime, silver has rallied back to the $18 per ounce area a new high for the year, but still $4 per ounce below its all-time high of $22 from February 2008. However, the way these markets are trading now, its probably only a matter of time before silver gets back up to those all-time highs. For now, both gold and silver look very strong.

Lets take a quick look at few other commodities making large moves lately

Corn bottoms out and is ready for a weather-induced run

The corn market has finally come off the lows that its carved out since the highs of 2008. Prices bottomed out a few weeks ago just above the $3 per bushel level and have since moved up near $3.73 per ounce.

With colder, wetter weather sweeping through the corn belts of the Midwest and hampering the harvest, the focus has shifted to whether the crop size will be as large as predicted. Look for December 2009 corn futures to rally up to $3.90 per bushel as the next move.

A tug-of-war in the natural gas market

Despite its continued spell in the doldrums, Ive held a bullish outlook on natural gas for quite some time and it could finally be coming to fruition.

With the large storage of underground supplies still swamping the market, it seems that all the fundamental news has now been priced in and traders are focusing on the cold winter ahead.

This has provided the impetus for natural gas to finally move off the lows it has logged since the highs of 2008. After bottoming near $3.500 per MMB/tu just a few weeks ago, natural gas has tacked on an impressive 1,500 points ($1.500) to rally back up to levels last seen in early August.

With short-term resistance just ahead (at the $5.000 per MMB/tu mark), we could see either a slight pullback, or a neutral move over the next few weeks.

The bulls and bears are currently waging a tug-of-war, with bears still citing the large supplies for a fall in price, while bulls believe winter could deplete the reserves.

Lastly, we move to the sugar market

Sugar set to drop and drop big

I profiled sugar as a potential shorting opportunity back in late August. At the time, it had carved out highs not seen in over 28 years, due to supply concerns in two of the worlds biggest sugar-producing nations Brazil and India.

As with any market making new highs or lows, there comes a point where all the fundamental data gets factored into the market. Its then a question of how long can those prices hold. For sugar, I believe the time has certainly come for the market to drop and drop big.

In fact, the March 2010 sugar futures the most actively traded contract have already started to crack. If you want to play the downside, you could buy limited-risk put-option contracts for the March 2010 or May 2010 expiration periods. These contracts trade on the floor of the NYBOT/ICE exchange in New York City.

• This article   was written by Lee Lovell and was originally published in the free daily investment newsletter the Investment U e-letter on 7 September 2009.