Commodities are officially the best performing asset class of 2023 – Where will prices go from here? [Video]
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Another day and another Commodity hits new record highs. That’s one of the most lucrative trends of the current financial climate that we find ourselves in right now!
A long list of the world’s most powerful Wall Street banks have described the current economic climate as “The Golden Age of Trading”.
This comes as no surprise, given today's highly macro-driven environment is fuelling a “perfect storm”, sending Commodity prices across the board from the metals, energies to agriculture skyrocketing to fresh multi-month and multi-year highs.
You certainly cannot talk about Commodities without mentioning Gold – And that’s because the precious metal has been on a parabolic run since the Israel-Hamas conflict began on October 7.
On Monday, Gold prices surged to a five-month high off the back of escalating conflict in the Middle East and growing expectations that the Federal Reserve may not hike interest rates again in this increasingly uncertain geopolitical climate.
The precious metal has been on an unstoppable run, rallying from near the $1,800 level at the beginning of October to above $2,000 an ounce – notching up an impressive gain of over 21%, from this time last year.
The bullish momentum has also split over into Gold priced in other currencies such as British Pounds, Euros, Australian Dollars, Japanese Yen and Chinese Yuan – sending prices skyrocketing to all-time record highs.
The big question now is will Gold price in U.S dollars be next to hit all-time highs?
Only time will tell, however one thing we do know for certain is that right now, Gold is doing what it does best – acting as the ‘go-to’ safe-haven in times of uncertainty.
Elsewhere in the Commodity markets, another star performer has been U.S and European Natural Gas prices. Both contracts have been on a tear with European Natural Gas prices climbing 52% this month, while U.S Natural Gas prices jumped over 15%, in the last week alone.
Whilst the Precious Metals and Energies are grabbing all the headlines right now, one of the best kept secrets in the Commodities sector that nobody is paying attention is Agriculture.
Orange Juice prices have quadrupled this year and are breaking new all-time record highs almost every week. So far this year, Orange Juice prices have tallied up an impressive gain of 600% from their 2020 lows.
Meanwhile, Cocoa has risen 400%, with prices currently trading at the highest level since 1979. And last, but not least, Sugar prices have racked up a phenomenal gain of over 450% from their 2020 lows.
Since the beginning of this year, analysts from Goldman Sachs, JPMorgan to Bank of America have repeatedly described commodities as their “preferred asset class over the next decade”.
And now we are starting to see why!
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
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