Last year April, I wrote an article “The Great Rotation of Gold“. I am a firm believer that the long term Commodity bull has run its course and money has to flow to other assets. True enough, the Gold price has been falling for the past two years as shown in the chart below.
However, that doesn’t mean the Gold price will keep on dropping but I believe it will most likely normalize and trade in a range for a long time.
Having said that, Oil prices have finally joined other falling commodity prices. Below is the crude oil price chart. In my opinion, prices will likely stabilize near today’s levels.
If so, will it provide an extended bullish backdrop for global growth? Obviously it is not for everyone. At least much of Latin America, the Middle East and Russia will suffer from this.
This reminds me of an article I wrote in 2011, “Oil your culprit? It is Deja Vu again” When newspaper frequently blames high oil price for stock market corrections. I am interested to know what is the next “culprit” should stock markets drop again.
People always have reasons for what has happened, but little insight into the future.
Do you agree?
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