Which Commodities Are Set For A Bull Run And Why?

Even a casual look at the quarterly reports that have been coming out during the latest earnings season shows that inflation is looming.

Many companies report that they are seeing increasing prices from their suppliers, and are actively hedging against inflation. It’s pretty much fact at this point that we’re in for a bout of inflation. The question now is whether it will be just a short spike, as the Fed and Treasury Secretary say; or whether it will be more long term.

In any case, commodities are one of the most attractive as well as common investments to set value aside in case the price of currencies goes down.

But, not all commodities are the same. Not all currencies are the same, for that matter.

So, where might be just as important a factor in considering whether certain commodities will actually increase in value.

The classics

The dollar is the world’s reserve currency still, and therefore is the standard for liquidity.

Gold is priced in dollars, so if we are expecting inflation in the dollar, we’d be looking at a higher price for gold over the course of the rest of the year.

Silver is in a similar situation. People often refer to it as “the poor man’s gold” since it’s easier to make smaller investments in it. Of course, this isn’t a consideration when people are investing in ETFs, instead of buying the physical commodity.

This means both silver and gold are likely to fall into the category more of “conserving” value.

Where to make money

Of course, the idea is to not only preserve purchasing power, but actually have an asset that becomes more valuable.

With global logistics still reorganizing after the pandemic, and some production sites still closed, there are many commodities that have been on a wild journey.

Prices in commodities are based more on the expectation of imbalances between supply and demand. Demand for a particular commodity can increase a lot faster than it takes to find and develop mining operations for it.

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William K. 1 month ago Member's comment

Why any would claim that dumping huge amounts of cash into the economy would not lead to inflation is fairly clear: They knew fully well that it would lead to inflation but they refused to admit it. In summary, they lied to hide the painful truth!

Will the inflation hitting the people living only in the USA? Or will it cause damage all over the world? My thinking is that it will be more damaging here at home, but that others will suffer the secondary and tertiary results a well.

Really, those responsible should be rewarded appropriately, which an happen because their names are all known already.