It’s Not Just Gold. This Is A Full-On Commodities Bull Market
Which, ironically, is a good reason to be careful
First, uranium had a nice run. But it was all alone for a depressingly long time.
That changed a couple of months ago as gold, silver, and copper began runs of their own:
Nickel, meanwhile, has staged a nice recovery from its brutal late 2023 flash crash:
The point? This isn’t just gold breaking out of its trading range. We’re witnessing the launch of a broad-based commodities bull market. And history says that once such a thing gets started, it can persist for a very long time (on the following chart, CAGR stands for “compound annual growth rate”).
Another way of analyzing this trend is to compare commodities to equities. The next chart is a bit outdated but its point remains valid: Commodities are dirt cheap relative to the S&P 500, and if history repeats, gold, copper, etc., should outperform tech and financial stocks for another decade or two.
This is potentially a once-in-a-generation cycle, with “real” replacing “financial” in the esteem of momentum traders. But don’t jump in with both feet. The charts on this page contain multiple bull market corrections. And after the nice recent run, a double-digit percentage loss for many commodities won’t be surprising.
So continue to buy high-quality commodities stocks gradually via low-ball bids, dollar cost averaging, or put writing.
