Commodities Super Cycle: Real thing, or marketing hype?

CPM Group analyst Jeff Christian. Image screengrab via YouTube.

In Economics 101 vs Commodities Super Cycle, CPM Group’s Jeff Christian fleshes out the concept of a “Commodities Super Cycle” debating whether it is a real thing or just marketing hype, and shares CPM’s most updated views on gold, silver, and platinum.

The commodity super cycle

“When the phrase was coined around 2005, I said ‘this is marketing hype’. The reason why commodity prices were rising from 2002 to 2008…to 2011, depending on which commodity, had to do with basic economics, Christian says.

“If you knew supply and demand analysis and you did your work properly, you knew why commodity, oil, grains, and metals prices were rising. It was basic economics, and the concept of a ‘commodities super cycle’ was a carnival barker’s hype.”

And it still is, Christian argues.

We got over it, Christian points out, after commodities prices moved into a cyclical downward spiral for three to five years, but now have come back.

“I think it’s very easy to discriminate good from bad information in the commodities markets. If someone’s talking about basic economics, they’re basically an economist and an analyst, and they’re looking at the markets and they’re studying the markets. If someone comes at you with the commodity super cycle – they’re a marketing person – and its carnival barker,” Christian says.

Christian emphasizes the amount of “strange” information floating around the markets – especially in the silver market, and to a lesser extent in platinum and gold.

2021-22 gold forecast

After hitting a record high in August 2020, gold prices spiked down sharply in November, came back over the course of December, spiked up in January, then plunged down $145 in two days over January 6-7 2021.

Christian says this is a negative sign for short term price moves. CPM’s forecast:

Expect lower price in 2nd and 3rd quarters…gold price will increase about 6% on an annual average basis. Less than the 37% 2020 saw on an average annual basis. Pandemic, recession, economic instability and political unrest spurred investors to buy gold. 2021-22 will see slower growth on the upside, and some price weakness as the pandemic comes under control and the economy recovers.

Jeff Christian

For silver and platinum forecasts, watch the full video here.