Jeffrey Currie, head of Commodities Research at Goldman Sachs, said there is the beginning of a structural bull market in raw materials. The main reason behind this push is a variety of policies that are driving demand. The U.S. and Europe’s supply chains have been in a rut due to the pandemic, but governments are looking to change how they interact with the economy post-pandemic. The U.S. and China are looking to retool their supply chains in a variety of industries. This policy-focused push is creating micro-price pressures in industries. The supply can’t keep up currently, so as the dollar continues to weaken amid inflationary pressures commodities like oil offer an outlet to hedge the macro factors. Crude oil, copper, and Natural Gas are all up in 2021.
FINSUM + Magnifi: Leading research shows how this pandemic had a unique spillover across industries as supply chains became disrupted. Now that signs of life are picking back up, demand for commodities is improving.
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