Commodity Prices Set For Their Biggest First Half On Record In Over A Century – What’s Next?

Phil Carr
Updated: Jun 13, 2022, 09:56 GMT+00:00

A dominate theme of the current Commodity Supercycle that needs no introduction is rapidly surging global Inflation.

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Commodity Markets Fundamental Analysis

Commodities are once again starting to attract a lot of attention on a scale not seen since the Global Financial Crisis in 2008 as traders rush to capitalize on the biggest and most explosive macro themes driving the Commodity Supercycle from Rapidly Surging Inflation, The Global Energy Shock, EV Revolution and Global Food Crisis.

Over the last 12 months, the primary Cost of Living Expenses from Food, Fuel and Energy prices – have all been rising at double-digit annual rates for the first time since the early 1980s. U.S CPI data released on Friday, once again showed a further surge in those unavoidable areas of spending with Consumer Price Inflation rising at its fastest pace in 41-years.

It is becoming more evident, day by day, that Central banks across the world are fighting a losing battle against red-hot inflation and it seems no matter what actions they take, it will be nowhere enough to tame ever-rising inflationary pressures.

Many of the world’s leading economists including former U.S Treasury Secretary Larry Summers have called the Fed’s characterization of “Inflation as transitory” – as delusional and the worst inflation call in the history of the Federal Reserve.

As traders very well know – when inflation accelerates at a red-hot pace, so does the prices of Commodities. That’s why it’s no surprise that Commodities are outperforming every other asset class out there and are firmly on track for their biggest first half on record in over a century.

Another week and another Commodity skyrockets to fresh record highs. That’s one of the most lucrative and exciting trends of the current Commodities Supercycle that we find ourselves in right now.

Last week, Oil prices soared back above $120 a barrel to hit their highest level since March. Elsewhere, Natural Gas prices blasted through all-time record highs. Natural Gas price have now tripled since January – rallying from just under $3.50 to a recent high of $9.45 – notching up a whopping gain of over 170%, so far this year.

Friday’s hotter-than-expected Inflation data also injected new bullish momentum into the precious metals market – propelling Gold prices from just under $1825 to a fresh monthly high of $1876 an ounce – up over 500 points within literally a matter of hours!

In total 27 Commodities ranging from the metals, energies to soft commodities have tallied up astronomical double to triple digit gains, already within the first 6 months of 2022.

And this is just the beginning!

According to Goldman Sachs; we are at the beginning of “The Great Rotation”.

As Inflation, Rate Hikes and Recession risks continue to mount – traders and investors are pulling money out of risky assets such as Equities, Cryptocurrencies and FX at record levels and switching to Commodities to maximize on the dual benefits of safety and high returns on offer in this new economic climate, we’re now entering.

This ultimately adds further bullish tailwinds to the Supercycle – positioning commodities as one of the most lucrative asset classes of the year, if not the decade. Whichever way you look at it, the case for commodities in a well-diversified portfolio has never been more obvious than it is right now!

Commodity Price Forecast Video for 13 to 17 June 2022

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Phil Carrcontributor

Phil Carr is co-founder and the Head of Trading at The Gold & Silver Club, an international Commodities Trading, Research and Data-Intelligence firm.

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