For much of 2024, gold and silver have captured the headlines. You could probably also add oil as Middle East tensions accelerate and Russia/Ukraine war continues. However, over the past month, several other commodities have shot up between 10%-20% higher.
I’m talking about…

Commodities like Copper, aluminium, tin, zinc, nickel and manganese.

So, what’s the possible reasons driving commodities higher?

Without commodities, there’s no future technologies, green energy or infrastructure… We live in a digital age. Most of us make money working on computers, whether it’s in an office or, nowadays, at home.

You most likely spend your time on tablets or phones scrolling through social media and reading the latest news. So, it’s easy to forget the world doesn’t just run on ones and zeroes…

It runs on REAL physical stuff. Stuff that needs to be dug up and shipped around the world.

By REAL “stuff”, I’m talking about commodities like oil, copper, aluminium, PGMs…you name it.

Without them, the modern economy and the tech we use today would cease to exist.

However, the major problem the world faces today and going forward is sufficient supply of commodities. Some more so than others.

After all, future powerful technologies like artificial intelligence, green energy such as solar and wind, electric vehicles (EVs) and infrastructure development need commodities to make them work.

And of course, countries are fighting to become the leaders in these fields. To get ahead, countries need sufficient supply of commodities.

For years, China has positioned itself as a leader in commodity production, imports and exports. China has also been securing massive supplies of critical metals like copper.

Of course, China’s leading commodity-edge has made the US and EU nervous. And it’s the reason why the Inflation Reduction Act (IRA) and Chip Act were introduced. So that the west can secure its own supply of critical minerals and metals. And more importantly, not having to rely on China.

But there are other reasons why commodities have gained traction in 2024…

Debt and currency devaluation makes commodities more attractive. Tensions are breaking out across commodity-rich nations.
This won’t only affect the supply of basic minerals and energy over the coming years, it can also drive inflation higher. This is not a situation that bodes well for cash or bond holders. Given the pressure on central bankers to moderate interest rates, there’s very little room (or appetite) to push rates higher from here, even if inflation picks up.

National debt loads in many countries are already at historically high levels – particular the US. In fact, the US government now spends $1 trillion on debt repayments. And that’s not sustainable.

In the meantime, the purchasing power of cash is eroding. BRICS countries are shunning the dollar and trading in their own respective currencies.

And more importantly, scooping up gold and silver to insulate them from currency devaluation. After all, commodities are REAL assets, which central banks cannot print into existence.

Going forward, we’re going to see a lot more countries and companies within those countries doing everything in their power to secure critical metals and minerals.

The economic futures of countries depend on it. And as investors, you want to position your portfolio to profit from this global drive to secure commodities.

That means, owning listed miners or commodity-ETFs. Either way, you don’t want to miss out on the commodity boom – that’s why South African Investor has you covered. Claim a free copy of our South African investor special report: Three smart ways to profit from resource scarcity.

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