Commodities & Gold

Commodities & gold are a key topic on InvestingHaven. That’s because they represent one of the five key investment asset classes. Arguably, there are more key asset classes but the scope of InvestingHaven is limited to the following 5: stocks, bonds or treasuries, commodities, currencies, and the crypto market.

Commodities are known to be very volatile, both to the upside but also to the downside. That’s why investors should be prudent when taking positions in commodities.

Between 2001 and 2011 most commodities, including gold and silver, went through the roof. That’s because real inflation was on the rise. Interest rates were falling. Moreover, it was a ‘risk on’ period with the exception of early-2008 till early-2009. Both real inflation as well as ‘risk on’ are a great environment for commodities.

Since 2011 however commodities are in a downtrend. Some call if the era of ‘great deleveraging’. We saw a major bottom in commodities in January of 2016. As we kick off 2019 we believe that commodities are neutral at worst and some specific commodities bullish at best.

In the end none of our 4 scenarios described on our Commodities Forecast For 2018 did really materialize. Commodities sell off around summer of 2018 but are still trying to figure out whether they continue to be bearish or neutral.

Gold, specifically, has followed the path of all other commodities. It was bullish in 2016, neutral in 2017, neutral to bearish in 2018. We expect a neutral to bullish year in 2019.