Gold, silver extend gains for second day, Hanke says start of commodity price super cycle ‘might be in the wind’

(USAGOLD –2/9/2021) – Gold and silver extended their gains for a second day this morning as concern mounted over the impact of the federal government’s stimulus program and the need for massive Federal Reserve support to fund it. Gold is up $14 at $1847. Silver is up 29¢ at $27.66. In the background, while attention has been focused elsewhere, commodities have quietly surged higher since last May. The CRB Index, which tracks a basket of nineteen different commodities ranging from cocoa and orange juice to gold and silver, is up 9.4% already this year. It is up 73% since last May’s bottom. (Please see our Chart of the Day.) Saying that commodity prices have been “annihilated” in recent years, Johns Hopkins’ economist Steve Hanke believes that a return of the commodity supercycle is now in the offing. “When that happens,” he told Kitco News, “you start running down inventories, a lot of producers go the wall and shut down so supply gets very constrained. And then the economy starts kicking in and moving forward, commodity prices go way up and you do start a super cycle. And we are seeing the initial signs that might be in the wind.”

Chart of the Day

line chart showing increase in commodity prices since May 2020

Chart courtesy of TradingEconomics.com • • • Click to enlarge

Chart note: The CRB Index which tracks a basket of nineteen commodities is up 9.4% in 2021 and 73% since last May’s bottom. For more, please see above.

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