Historically low supply and booming demand as the world recovers from COVID-19 make for ideal conditions to invest in commodities. There’s never been a better time to own commodities, according to US investment bank Goldman Sachs, which has bullishly forecast a decade-long commodity “super cycle”.
In a recent Bloomberg TV interview, the bank’s global head of commodities research Jeff Currie said he’s never in his 30-year career seen commodity markets pricing in the shortages they are right now.
Describing the current global economy as an “unprecedented” environment, Mr Currie highlighted the severe backwardation of most commodities’ price curves.
Backwardation is a market structure that indicates the cost of delivery today is higher than tomorrow. This event has only occurred seven times in the last 50 years and Mr Currie attributes it to “textbook shortages”.“2008 was a financial crisis – this is a molecule crisis. We’re out of everything: oil, gas, coal, copper, […]
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