Print 
PDF
BookmarkLONDON(Commodity Online): The super cycle in commodity bull market is positive news for gold prices, says Jim Steel of HSBC. A research by the International Monetary Fund regarding commodity super-cycles says that the commodity bull market that started in 2001 is not over.
Commodity super-cycles from the mid-19th century is reviewed by the IMF research paper. It says that the super-cycles differ from short-term price changes in three key ways, according to a news nugget that appeared in Kitco news.
“First is that super-cycles are demand-driven and follow global GDP; second, they span a long time, with upswings over 10-35 years and with entire cycles taking 20-70 years to complete; third, they occur over a broad range of commodities, but are usually a function of inputs for industrial production and urban development”.
During these super cycles positively correlated with commodities when bullion could float freely, steel added.
“According to the study the current commodity cycle shows no sign of exhaustion. This reaffirms our view that while gold prices have eased, they are likely to be supported in part by commodity prices. According to the paper the most recent boom in global economic growth dating from 2001 is unprecedented. Economic growth is also the single most important driver of commodity prices according to the IMF presentation. HSBC macroeconomic forecasts look for strong growth for China and much of the emerging world,” Steel says.
