President Donald Trump’s military action in Venezuela has set off a chain reaction in the commodities market, sparking predictions of a new ‘supercycle’ and a prolonged boom, says analyst.
Markets Echo Early-2000s Supercycle
The current market environment is reminiscent of the commodities “supercycle” that occurred in the early 2000s, according to John Velis, a macroeconomic strategist at BNY in New York, reported MarketWatch on Sunday.
Velis attributes the rise in hard-asset prices to various factors, including geopolitical risks, a global increase in money supply, and expectations of more dovish central-bank policies. The strong growth of AI- and tech-related capex is also a contributing factor.
He noted that hard assets have seen significant growth at the start of the year, with the previous year’s rally in precious metals now extending to industrial metals. This trend could potentially spread to the energy sector as global growth sentiment for 2026 improves.
Velis said valuations favor hard assets over equities, making them attractive entry points, with industrial demand expected to rise.
Hard Assets Rally Amid Policy, Geopolitical Risks
The recent surge in hard-asset prices aligns with the predictions made by analysts earlier this year. Bank of America had advised investors to stick with gold, invest in uranium, and buy copper before the market fully reprices it, citing rising U.S. industrial policy, a potentially weaker U.S. dollar, persistent geopolitical tension, and growing uncertainty around tariffs as the driving forces.
Commodity analyst Lawson Winder also named Agnico Eagle Mines Ltd. (NYSE:AEM), Cameco Corp. (NYSE:CCJ) and Freeport-McMoRan Inc. (NYSE:FCX) as his favorite picks.
Meanwhile, Danny Moses, a prominent figure in the finance industry, predicted that gold prices would double from their current levels over the next few years, a trend he believes is already in motion. He pointed to gold and silver outperforming most asset classes in 2025, suggesting that precious metals have shifted from hedge status to leadership assets.
Amid these predictions, Goldman Sachs warned of continued extreme volatility in the silver market, driven by tight physical supply in London, shifting trade flows to the U.S., and rising geopolitical frictions.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
