Commodities Pointing Towards a ‘Great Reset’ as Gold Rises and Others Fall
Amidst escalating geopolitical tensions and various influences, commodities are experiencing significant shifts. While the price of gold has reached an all-time high (ATH), Bitcoin has grown by 160% this year. In contrast, other commodities are declining, indicating a potential “great reset.” Bloomberg commodities expert Mike McGlone suggests that gold is rising while its competitors are falling, with the possibility of this trend accelerating in 2024.
Conditions for Rebound
McGlone highlights certain factors that need to align for a potential rebound in commodities that have been trending downwards throughout 2023. These factors include a reversal of China’s property crisis and Europe’s recessionary tendencies, a resilient US stock market, and a weak dollar. However, he also acknowledges that the reverberations from Russia’s invasion of Ukraine and the Federal Reserve’s aggressive tightening policies may remain significant obstacles for commodities in 2024.
Furthermore, McGlone has been warning about an impending severe recession in the US economy in 2024. He attributes this to factors such as aggressive monetary policy tightening, a strong labor market, and various economic metrics like consumer spending and income. Additionally, he predicts that the spot gold price rally is far from over and expects it to surge to $3,000 per ounce in 2024 due to its resilience amidst adverse macroeconomic conditions.
Hot Take: A Reset on the Horizon
The current state of commodities suggests a potential “great reset” where gold continues to rise while other commodities face downward trends. Factors such as China’s property crisis, Europe’s recessionary tendencies, a resilient US stock market, and a weak dollar could determine whether these declining commodities can rebound. However, challenges like Russia’s invasion of Ukraine and the Federal Reserve’s tightening policies may pose significant obstacles in 2024. With the predictions of a severe recession looming for the US economy, gold’s strength in adverse macroeconomic conditions remains a key factor to watch. The future of commodities seems poised for a reset, and it will be interesting to see how these dynamics unfold.
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