Here’s why the commodity supercycle is about to get even bigger [Video]

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 macro themes driving the Commodity Supercycle from Rapidly Surging Inflation, The Global Energy Shock, EV Revolution and Global Food Crisis.

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

In the U.S, inflation is rising at its fastest pace in 40-years. In Australia, Canada and Europe inflation is at its highest level in 30-years. While in the UK inflation is now running at 9% – the highest level since 1982 and still accelerating fast!

If inflation continues to surge at the current pace across the world, then we’re only months away from a return to double-digit inflation on the same scale last seen in the 1970s.

As traders very well know – every 1% rise in inflation – ultimately equates to a 10% move higher in Commodity prices.

With inflation now running between 8-9% across many of the world's major economies – it comes as no surprise that a total of 27 Commodities ranging from the metals, energies to soft commodities have tallied up astronomical double to triple digit gains, already within the first 5 month of 2022.

And this is just the beginning!

Elsewhere, the Global Energy Shock that is unfolding day by day could be one for the record books.

Last week, Natural Gas prices once again blasted through all-time record highs. Natural Gas price have now tripled since January – rallying from just under $3.50 to a current high of $9.45 – notching up a whopping gain of over 169%, so far this year.

Another major theme of the Commodity Supercycle is the Global Food Crisis, which has positioned agriculture commodities as one of the hottest asset classes of 2022.

Since the days of the pandemic, farmers have faced a myriad of challenges including fertilizer shortages, drought and adverse weather, along with supply chain constraints and rising fuel prices cutting into transportation costs. Now the war in Ukraine has only exacerbated problems – sending agriculture prices across the board from Corn, Coffee, Soybean, Sugar, Wheat, Cotton to Lumber skyrocketing to multi-year and all-time record highs.

According to The World Bank – agriculture commodity prices could still surge another 60% this year from current levels and remain elevated well into 2024.

Last but not least is the EV and Green Energy Revolution. The switch towards a greener world is creating record-breaking demand for metals such as Aluminium, Copper, Cobalt, Nickel, Lithium, Platinum, Palladium, Uranium and Rare Earth metals.

While it's obvious that the world needs more Commodities and lots of them – there is just one big problem.

For the first time in decades, the world is running out of Commodities and facing an historic shortage off the back of a "triple deficit" – low inventories, low spare capacity and low investment.

As global demand continues to outstrip supply, this is fuelling an unstoppable Commodity Supercycle sending everything from the metals, energies to agriculture markets skyrocketing and positioning the entire sector as one of the most lucrative asset classes of this year, if not this decade.

A long list of leading Wall Street banks from Goldman Sachs, JPMorgan to Bank of America have described commodities as their “preferred asset class over the next decade”. This month, Warren Buffett, also joined that list – revealing that his biggest investment ever is currently riding on the Commodities Supercycle.

In the words of Buffett, “the Commodity markets right now, represent one of the greatest generational opportunities of our lifetime, not to be missed.”

All in all, the evidence is mounting that a new Commodity Supercycle is underway. 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!

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