Commodities at risk of reversing massive gains with ‘wild run’ similar to 2008, gold price to take on $2k – Bloomberg Intelligence – by Anna Golubova (Kitco News – May 04, 2022)

(Kitco News) The commodity market is at risk of a reversal that will be a volatile ride similar to 2008, according to Bloomberg Intelligence. In this scenario, gold looks like one of the best options, with the ability to breach $2,000 once markets identify the end of the Federal Reserve rate-hike cycle.

“Commodities are at increasing risk this year of a wild ride akin to 2008, a development that may shine on gold,” Bloomberg Intelligence senior commodity strategist Mike McGlone said in his May outlook report.

“Commodities climbed 50% in the past 10 years and the Producer Price Index is up 30%. Gains are likely to recede as the world faces a potential recession and the Fed tightens the reins … Rate hikes should coincide with peak inflation.”

Crude oil, one of the commodities that saw massive gains on geopolitical uncertainty and supply concerns, could reverse its gains and drop from about $100 a barrel to $50. Crude oil’s 2008 peak was around $145 a barrel.

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