Commodity prices across the board have made an explosive start to the month – registering their biggest back-to-back weekly gains on record since 1960.
So far this quarter, a total 27 Commodities ranging from the metals, energies to agriculture have tallied up astronomical double-digit single day gains – not once, not twice, but on multiple occasions – outperforming every other asset class out there.
Just take last week for example – every possible commodity imaginable from Aluminium, Copper, Palladium, Platinum, Gold, Silver, Lumber, Zinc, Crude Oil to Natural Gas prices surged following Thursday’s U.S Consumer Price Inflation data – with a long-list chalking up spectacular gains of 10% or higher – literally in a single day!
The exact same thing happened in the previous week, following the U.S employment report. And yes, you guessed it – the week before that too following the Bank of Japan’s currency intervention.
As a result, there’s really nothing historical you can point to for what’s going on in markets today. We are routinely seeing Commodities across the sector whip up spectacular back to back gains of 10% or higher, almost on a weekly basis – fuelling an era of enormous wealth creation like we have never seen before.
Looking ahead, more big moves could be on the horizon as traders shift their attention to U.S Producer Price Inflation data and the UK Autumn Statement.
Last week’s cooler-than-expected Consumer Price Inflation data offered some relief to the Fed, potentially indicating that October could be the start of a disinflationary trend that lasts through next year.
The headline Consumer Price Index rose less than expected – boosting expectations that supersize rate hikes are likely now in the rear view mirror. This week’s hotly anticipated U.S Producer Price Inflation reading will either boost or dampen expectations of a possible Fed “pivot” away from an aggressive interest rate hikes.
Elsewhere, this week all eyes will be on the UK Autumn Statement. After the disastrous “mini-budget” in September, which subsequently forced The Bank of England to revert back to unprecedented “Quantitative Easing” measures – this week’s Autumn Statement is already gearing up to be a major market-moving event, that traders will not want to miss.
Despite short-term UK borrowing costs stabilising since the market meltdown seen in late September, the Chancellor will need to present plans to address the 55 billion pound “black hole” in Government finances.
Should the Chancellor’s fiscal plan fail to instil confidence, then we could be on for a repeat of September announcement, which sent a long-list of commodities surging to multi-month highs – registering their biggest one-day move this year.
Extraordinary times create extraordinary opportunities and right now, as traders we are amidst “one of the greatest eras of wealth creation the world has seen”. My advice to you is, do not waste this opportunity!
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions: