The Commodities Bull Market

Commodities, including gold and silver, are in a powerful bull market.  

This is a ten-year chart of the Commodity Research Bureau’s index.  It tracks the price performance of 19 commodities divided into four main groups:

• Agriculture (41%): Corn, soybeans, wheat, cotton, sugar, coffee, cocoa, and orange juice.
• Energy (39%): Crude oil, natural gas, heating oil, and RBOB gasoline.
• Base/Industrial Metals (13%): Aluminum, copper, and nickel.
• Precious Metals (7%): Gold and silver.

As you can see, the commodity sector broke out in April 2020 and raced higher for more than two years.  Following several years of consolidation, it began marching higher earlier this year.

The latest move up was triggered by the attacks on Iran, and the closing of the Strait of Hormuz. Higher energy prices are one result of the war, coupled with its impact on other gulf resources including liquefied natural gas (LNG), agricultural fertilizers, and industrial resources like sulfur, aluminum and petrochemicals.

One must not overlook declining global confidence in the dollar.  Indeed commodity price indices are often used as proxy components for reflecting general price inflation.

We are drawing this overall commodities rise to the attention of our friends and clients because it is a powerful and confirming signal of a wider inflationary environment rather than merely an isolated move in one raw material or precious metal.  

To find out more, speak with a Republic Monetary Exchange gold and silver specialist.