With few exceptions, supercycles generally affect all commodities together. As we said before, the No. 1 driver of commodity prices is supply and demand. These are commodity specific and vary widely. But commodity prices tend to move in unison. There are two reasons for this… The first is due to the global nature of the commodity markets. Commodities are used around the world and are subject to macroeconomic conditions. Thus, an economic event, geopolitical event, or a natural disaster can drive worldwide commodity prices up and down…
The second reason for commodity prices moving in unison is investors and traders look at the same price charts. Therefore, reactions to patterns tend to be uniform. Let’s call it a herd mentality. This next chart shows commodity prices from 2000 through December 2016. You can see that prices have moved generally together. In 2017, they are back to levels last seen in 2005…
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