Gold and oil have been high-profile news for very different reasons in recent months.

Aside from a recent price lull, the precious metal has been attracting huge inflows as a safe haven from market turmoil. Meanwhile, just as BP appeared to have finally stemmed the Gulf of Mexico leak, another explosion -- this time in Dalian, China -- caused another oil spill, though admittedly of far smaller proportions.

One thing these oil crises have shown is the difference between buying commodity stocks and buying the underlying commodity, says David Donora, lead portfolio manager for commodities at London-based asset manager Threadneedle. "[The BP crisis] highlights the risks involved in extracting and producing commodities -- in particular, crude oil -- and the lengths to which these companies have to go to secure this supply," he adds.

The UK energy major's share price fell from about $60 immediately before the spill on April 20 to bottom out at $27 on June 25, before rising to close at $36.13 yesterday.

Investing in the underlying commodity rules out the impact of stock-price moves, and actively managing a commodity portfolio can be particularly effective for certain markets, says Donora. That said, Threadneedle does run a fund that buys commodity shares as well as underlyings. 

Looking at precious metals, Donora says he has been overweight that market since March 2009 "due to concerns over experiments in quantitative easing and the repercussions of government expenditure". "Clearly that's been more of an issue this year," he adds, "and that has pushed precious metals to even higher levels."

Moreover, Donora feels the recent slight drop-off in the gold price below $1,200 per ounce will be short term and he remains long-term positive on platinum group metals.

Industrial metals, by contrast, have seen a big pullback over the past few months -- by 30% in some cases -- and that's been "a very healthy correction", he says. "Demand has not fallen off anything like it did at the end of 2008."

All the growth in demand for industrial metals is coming from emerging markets and Asia, due to the huge amount of infrastructure that needs to be built, adds Donora. Hence, he sees the "more constrained commodities" -- such as iron ore, coking coal, copper and lead -- as being "pressure points, particularly if Western economies start growing more meaningfully".

Meanwhile, agricultural commodities should be more of a tactical play than a buy-and-hold strategy, says Donora. "Our approach in our long-only strategy recognises that the cost of carry for agricultural commodities -- in terms of storage, transport and so on, which cause a  negative roll return -- is significant," he says. "So we need to be tactical as to what to be overweight and when -- hence, seasonal effects and short-term views are important."

In the long term, water and land use will be big issues for agriculture, as will climate change, Donora argues. But that doesn't mean this is a market to buy and hold for five to 10 years and expect decent performance. "Better returns will come from a more tactical approach, which is something we do in our commodities hedge fund," he says.

But surely short-term trading is more difficult in relatively shallow and illiquid markets such as agricultural commodities? "The illiquidity of these markets is not really a problem as long as you know how to use them to the greatest effect," says Donora. "We've got a lot of experience to bring to bear in this area."

Commodity futures markets in Asia have traditionally been very domestic affairs, meaning firms like Threadneedle tend to trade on global markets such as the Chicago Mercantile Exchange, London Metal Exchange and New York Mercantile Exchange.

Still, there are moves to create more regional platforms, such as the Hong Kong Mercantile Exchange and Singapore Mercantile Exchange, and Threadneedle is investigating buying commodity futures on Asian exchanges, says Donora.

"Although we're benchmarking against a straightforward index, we're not constrained by just the commodities in that index," he adds. "So as opportunities present themselves, by all means we will participate."

Indeed, Donora foresees commodities developing into a $1 trillion global market in the next 10 years -- some three to four times its current size. "For example, commodities such as thermal coal or iron ore will become investable, and that will have a big impact," he says. "There are swaps market in those commodities, but they're very new and very narrowly traded, he says, and in a few years they will be a lot deeper."

Such developments will broaden and diversify the market and take some of the pressure off sensitive markets like agriculture, he adds, creating less need to impose position limits to curb speculation.