Commodities Never Do This During a Bear Market

This is why the current inflation has such a strong tailwind that may last much longer than thought. More pain will continue for our diminishing purchasing power with our hard earned money!😨

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By SentimenTrader

Pandemics. Droughts. Wildfires.

It's been a crazy year across the globe. It's impacting what consumers are paying for, well, pretty much everything. Including the most basic of inputs, what we put in our mouths.

Spikes in commodity prices can be dangerous things. They have triggered social strife and upended global supply chains. We're seeing nascent signs of that right now. Based on history, we may just be in the beginning stages.

The Bloomberg Commodity Spot Index has now jumped 50% over the past two years, according to Dean's calculations. This is something it has never done during a secular commodity bear market.

These gains are not being driven by only a single contract or two. It's exceptionally broad-based, which is perhaps even more concerning. Among commodities tracked by the S&P GSCI Commodity Spot Indexes, 100% of them are showing a positive 3-year rolling return. That hasn't happened in 17 years.

After that signal, commodities continued higher for almost four more years.