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Are we on the verge of the biggest commodity supply squeeze ever in history? [Video]

As we move through the second half of 2022 – the Global Energy Crisis is snatching headlines and firmly positioning itself as one of the biggest and most lucrative money making opportunities of the current financial climate that we find ourselves in right now!

Nowhere in the world has been immune from the unprecedented surge in energy prices this year, which has hit every major economy and pushed inflation to historic multi-decade highs.

Inflation, combined with the Global Energy Shock and worsening Supply Crisis is whipping up an extremely bullish money-making storm across the entire Commodities complex.

During the first half of 2022, a total of 27 Commodities ranging from the Metals, Energies to Agriculture soared at the fastest pace ever recorded – notching up astronomical double to triple digit gains in the process.

Is the rally over and has all the money been made?

Not by a long shot!

Following the stellar first-half performance, a number of highly essential Commodities have flipped into consolidation mode, which is very normal and to be expected! This is the typical tell-tale phase that comes before the next big “major move higher” in prices.

Right now, the Commodity markets are being squeezed from two directions. On one hand, demand is booming as economies recover from the coronavirus pandemic. On the other hand, sufficient supplies to meet this demand are being hampered by geopolitical factors.

While demand for energies has skyrocketed, investment in supply has been held back by the move to decarbonize economies. Natural gas prices have been pushed up by growing tensions between Russia and Ukraine – sending benchmarks on both sides of the Atlantic blasting through all-time record highs.

Natural Gas prices have soared to 12 times their average for this time of the year and we haven't even entered the winter months yet. Meanwhile, disruptions to supply chains and labor shortages have exacerbated pressure on the balance between supply and demand.

The commodity squeeze has triggered a series of extraordinary chain reactions in the market.

So far this year, 50% of the world’s commodity production from Aluminium, Copper, Cobalt, Nickel, Lithium, Palladium, Platinum, Uranium, Zinc and Rare Earth metals has already been forced offline due to the huge spike in prices.

Once the colder weather kicks in, this will enviably drive energy prices higher again, making it even more expensive to produce essential commodities the world needs to function and survive. This will ultimately lead to further global production cuts, mining and refinery closures and eye-watering shipping costs – opening the door to a major squeeze in prices ahead.

Throughout this year, a long list of leading Wall Street banks from Goldman Sachs, JPMorgan to Bank of America have described commodities as their “preferred asset class over the next decade”. In recent days, that chorus has once again become louder with Wall Street's biggest institutions, advising clients to pile back into commodities now – ready for the next big BOOM!

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

Author

Phil Carr

Phil Carr

The Gold & Silver Club

Phil is the co-founder and Head of Trading at The Gold & Silver Club, an international Commodities Trading Firm specializing in Metals, Energies and Soft Commodities.

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