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Commodity bulls are playing defence these days, now that the action has switched from how high oil can go to how low it can go - but they are hardly running away.

The Globe and Mail's John Heinzl wrote about Donald Coxe, chief strategist of Harris Investment Management, who believes that the U.S. Treasury Department orchestrated a rally in financial stocks by seizing control of Fannie Mae and Freddie Mac - a move that sent the U.S. dollar flying and crippled commodity prices that are priced in U.S. dollars.

No sooner had the ink dried on that piece than Jeff Rubin, chief economist at CIBC World Markets and one of the more bullish forecasters for oil, lowered his forecasts.

He now believes that oil will average $115 (U.S.) a barrel this year, down from an earlier forecast of $125; his forecast for next year is $130 a barrel, down from $150. Though he once believed that oil would spike to $200 a barrel in 2010, he has now gone quiet on that prediction.

In a letter to clients last month, Eric Sprott, chairman, chief executive and portfolio manager at Sprott Asset Management, may have been the most vocal about the commodities downturn. He has the most to lose. After taking his management firm public earlier this year, the shares have wilted to $4.83 in Toronto, down from a starting price of $10. His Sprott Canadian Equity Fund fell nearly 13 per cent in August.

He argued that the recent rally among financials stocks comes from a false sense of optimism - emanating, perhaps, from the government itself. Meanwhile, the optimism is hammering commodities, especially gold.

"As any good banker worth his salt knows, in order to pull off an even remotely believable rally in financial stocks it's necessary to commensurately pummel the price of gold," Mr. Sprott said in his note.

"We believe the bizarre action in the markets during July and August does not portend of a new trend. In our opinion, oil, gold and other real assets shall remain in a bull market and the faux-rally in financials will die the death of a thousand cuts."

In other words, he's sticking to his guns.

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