Boom and bust: How commodity super cycles influence gold and silver prices

LBMA-The Alchemist/Tom Brady and Chantelle Schieven/May 2023

“It is interesting to note that silver and gold prices appear to have increasingly trended in similar patterns to those of the industrial metals, particularly since President Nixon eliminated the backing of the US dollar with gold in 1971. Closing the gold window thus removed a very large non-industrial buyer of gold. Under the gold standard system, government could be counted upon to purchase mine production en masse at set prices, regardless of industrial growth or decline in any particular moment. Silver, with its broadening industrial demand, has been ~75% correlated with the Industrial Metals Index.”

USAGOLD note: Brady and Schieven believe we are headed for the boom phase of a new commodity supercycle that could last 10 to 20 years. Gold and silver, they show, have tracked supercycle booms in the past [Please see chart], and, as a result, they are “very bullish” on both metals over the long run.

Gold, silver, and producer price index industrial metals
(1925 to present, log scale)
overlay chart showing gold silver producer price index industrial metals 1925 present
Chart courtesy of • • • Click to enlarge

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