Commodities have made an exceptional start to 2023 – racking up specular gains already within the first two weeks of the year, as the sector-wide Supercycle continues to gather momentum.
Last week, Aluminium, Copper and Iron prices took centre stage surging to multi-month highs – tallying up double-digit gains. Elsewhere, Crude Oil prices posted their biggest weekly gain since October with WTI breaking above $80 a barrel, while Brent topped $85 a barrel.
The bullish momentum also split over into the Precious Metals with Silver prices scaling above $24 an ounce – while the star performer amongst the Precious Metals was Gold.
Gold has been on an unstoppable run this month, notching up its sixth consecutive day of gains on Friday – sending the yellow metal skyrocketing above $1,900 an ounce.
Since the final quarter of 2022, Gold prices have gone parabolic rallying over $300 an ounce from their November lows of $1,600.
Interestingly, each time, Commodities have made an exceptional start to the year – they have always gone onto the finish the year as the best performing asset class.
Now we are beginning to see why a long list of Wall Street banks from Goldman Sachs, JPMorgan to Bank of America have described Commodities as their “preferred asset class over the next decade”.
There are plenty of reasons why the world's most powerful financial institutions are “extremely bullish” on Commodities. These include; underinvestment in new capacity, tightening supply vs soaring demand, China’s reopening, economic stagflation and signs of a dollar peak – coupled with a slowing of global central bank rate hikes, leading to the eventual end of rate hikes in the first quarter of 2023.
And let’s not forget the switch toward a greener world, which is fuelling fierce demand for Commodities such as Aluminium, Copper, Cobalt, Nickel, Lithium and Uranium as economies race to decarbonize the world by 2030.
The previous two Supercycles took place in the 1970s and the 2000s. In both cases, the Commodities sector resembled the identical tell-tale signs, as it’s displaying once again right now.
If history is anything to go by, then the stage is almost certainty set for Commodity prices to outperform every other asset class out there for a third consecutive year running!
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
Trading has large potential rewards, but also large potential risk and may not be suitable for all investors. The value of your investments and income may go down as well as up. You should not speculate with capital that you cannot afford to lose. Ensure you fully understand the risks and seek independent advice if necessary.
Recommended Content
Editors’ Picks
EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.