What Will A Return Of 1970s-Style Inflation Mean For Commodity Prices?

Data released last week, showed Consumer Price Inflation in the U.S surged a whopping 7.5% last month from a year ago – its largest annual increase since February 1982 and a significant jump from the 7% Inflation rate reported in December.

Historically, when inflation accelerates at a red-hot pace, so does the prices of commodities.

So far this year, a long-list of Commodities have blasted through multi-year highs including Aluminium, Copper, Coffee, Cotton, Nickel, Palladium, Lithium, Uranium and Natural Gas – just to name a few.

Meanwhile, Oil prices have surged above $95 a barrel for the first time since 2014 and have more than doubled from this time last year.

According to Goldman Sachs, “they have never seen the commodities markets this bullish before”.

Looking ahead, the biggest macro event that traders will not want to miss out on is the Federal Reserve’s favourite measure of inflation – Personal Consumption Expenditures (CPI) data.

The reading is expected to top forecasts again for yet another straight month in a row, which may inevitably force the Federal Reserve into another major policy mistake of tightening too aggressively, too late.

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions: