Baru.v - commodities supercycle - Barrons Gold, Oil, and Copper Prices Are Set to Rise,
https://www.barrons.com/articles/gold-oil-copper-commodities-supercycle-jeff-currie-bf66686c
"Commodity prices have held up relatively well but haven’t risen in a straight line. Is there a difference in this latest supercycle?
One thing that makes this cycle radically different from the 1970s or the 2000s is that we don’t have dollar recycling going on. Dollar recycling works like this: Commodity prices go up. A country like Saudi Arabia earns money. It buys U.S. Treasuries, and it puts downward pressure on U.S. yields. The lower yields in the U.S. create a weaker dollar. The weaker dollar reinforces growth outside the U.S.
We don’t have that this time around. What’s different is that China isn’t buying U.S. Treasuries. Thus, we don’t have lower yields, and we don’t get the weaker dollar.
What happened?
After Russia’s central-bank assets were seized, central banks throughout emerging markets bought gold and sold their U.S. bonds. [The U.S. and other countries froze $300 billion in Russian central-bank assets held in banks around the world after Russia invaded Ukraine in 2022.] Why? Because they wanted something that the U.S. can’t touch. I would assume all these emerging markets are bringing their gold home and buying more.
Is that why gold has done so well in the past two years?
The gold story is rock-solid. Rate cuts are in front of us. Emerging market central banks are continuing to buy as they diversify their holdings out of dollar-denominated assets. There is also continued strong gold demand from China as a substitute for [investing in] the property market."