Precious Metals And Agricultural Set To Soar As Recession Edges Closer

Phil Carr
Updated: Apr 24, 2023, 12:42 UTC

There is no denying that the current macroeconomic backdrop is fuelling a "perfect storm" Commodities positioning the entire sector on track for its biggest year since 2008.

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The U.S Federal Reserve’s Dilemma

With terms like “Crisis”, “Credit Crunch” and “Recession” now dominating the headlines – traders have turned their attention to whether the U.S Federal Reserve will pause its interest rate hike cycle or continue to press ahead with another interest rate increase next week.

Right now, there is no doubt that the Fed is caught between a rock and a hard place. If the Fed continues hiking interest rates, then they inevitably risk breaking more things in the financial system – just like we have recently seen with collapse of several prominent banks in the United States and Europe.

However if the Fed pauses their rate hiking campaign – then that will ultimately lead to a resurgence of inflation, which will hurt households, industries and entire economies around the world –potentially sparking a bigger crisis ahead.

Platinum’s Quiet Outperformance

While it’s no surprise that, Gold is one of the most popular safe havens, especially in times of crisis.

There’s another less talked about precious metal which is quietly outperforming Gold this year.

That precious metal is Platinum.

Since the beginning of April, Platinum prices are up almost 15% – bringing its quarterly gain to just under 24%. That’s Platinum’s biggest quarterly increase since the first quarter of 2008.

According to the World Platinum Investment Council, Platinum is one of the most undervalued metals on earth right now and presents significant upside potential compared to its peers.

If Gold prices are going to $2,500 an ounce this year – like many of the world’s leading Wall Street institutions forecast – then Platinum prices are heading in one direction.

And that’s higher, a lot higher!

Agriculture: The Best Kept Secret in Commodities

Elsewhere one of the best kept secrets in the Commodities sector is Agriculture.

Unlike other Commodities, the world cannot function or survive without Agriculture. Regardless of whether the overall economy is in a recession or booming, people still have to eat – making Agriculture both recession-proof and crisis-proof. These unique features have positioned Agriculture as one of the hottest asset classes of 2023.

Unprecedented demand for safety, diversification and high returns during this period of economic uncertainty – has sent Orange Juice, Coffee and Cocoa prices surging to their highest level on record. Meanwhile, Sugar prices have quadrupled this year and are setting new record highs almost every month. Last week, Sugar prices soared to their highest since 2011 – tallying up an impressive gain of over 150% from the 2020 lows.

The World Bank predicts, Agricultural Commodities could still surge another 240% from current levels and remain elevated well into 2026.

We’re just over a quarter way into 2023 and it has already been a massive year Commodities – but this could just be the beginning of the markets best year ever since the Global Financial Crisis in 2008.

Commodity Price Forecast for April 24, 2023

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

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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