Agoracom

That's clearly been the case over the past 10 months, with the TSX Venture Exchange Composite Index falling by nearly 700 points or 20.7 per cent from its May 2007 peak.

That's a far bigger hit than that incurred by any senior equity index, including Toronto's S&P/TSX Composite Index. On the heels of Tuesday's big gains and Wednesday's small pullback, Canada's top equity benchmark is now just 9.2 per cent below its October high.

For hundreds of small and mid-size outfits that trade on the resource-rich Venture Exchange, the recent retreat in stock values has been even steeper than the junior index indicates, with many shares losing 50 per cent of their value.

What's different this time is that commodity prices have yet to fall off a cliff, as they have in past cycles. In fact, quite the reverse, as demand from China and other fast-growing Asian economies offsets U.S. weakness.

Gold and oil prices have recently touched new record highs. Copper is still within range of its all-time high, and prices for uranium, silver, nickel, aluminum, zinc and other metals are still robust, versus historic levels.

More importantly, a growing number of analysts believe commodity prices will stay "stronger for longer" -- as one Bay Street firm puts it -- in the current economic cycle, even if the U.S. tumbles into recession.

That's because China has become the biggest consumer of key industrial metals such as copper, replacing the U.S. And despite rising inflation and other worries, China's economic juggernaut continues to roll along.

So while many observers expect average metal prices to be softer this year than last, they're calling for a sharp rebound in 2009. In a recent report, UBS Investment Research dramatically hiked its projected 2009 prices for copper, nickel, aluminum and zinc.