Don’t fight the Fed – Commodities may have gotten the message

BloombergIntelligence/Mike McGlone/1-4-2021

“The problem with commodities for 2022 is some normal reversion may seem extreme. Crude oil at the top of our 2021 scorecard vs. gold on the bottom is the pair we see as most subject to trading places. The roughly 20% 10-year decline in the price of crude to Dec. 22 vs. closer to a 30% gain in spot gold indicates the enduring trends, which we expect to return in 2022.”

USAGOLD note: Bloomberg’s McGlone expects to see this flip-flop between gold and the commodities (most represented by oil) occurring under a deflationary scenario in 2022. His January Commodity Outlook details prospects for the range of commodities.