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After a lackluster decade for commodities, a cross-section of Wall Street luminaries from Pimco to Point 72 is now predicting a broad commodity rally thanks to the so-called reflation trade. Indeed, Wall Street is predicting a new commodity bull market that will rival the oil price spikes of the 1970s or the China-driven boom of the 2000s. Market experts, including Goldman Sachs, believe the commodity boom could rival the last "supercycle" in the early 2000s that powered emerging BRIC economies (Brazil, Russia, India and China). The price movement of most commodities has historically been both seasonal and cyclical. Peering at the 10-year charts of leading commodities reveals a clear pattern of mean reversion where prices tend to oscillate backwards and forwards towards their mean or average. This fact alone lends some credence to the so-called commodity supercycle and offers the bulls some hope that it might not be long before the good times return. Source: US Global Investors That is already happening as we speak. The Bloomberg Commodities Index (BCOM), the most widely used benchmark for the commodities market tracked by 23 exchange-traded contracts on physical commodities and approximately $85 billion in assets, has rallied 9.3% in the first […]
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