JPMorgan Predicts That Global Commodities Prices May Rise by 40 Percent

Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia, on March 10, 2022. (Alexander Manzyuk/Reuters)

 

Russia is a main supplier for up to 10 percent of global energy production and about 20 percent of global wheat production. The commodities affected include oil, which is already up 33 percent from the same month the previous year, while natural gas has gone up by 65 percent since the invasion roiled the markets. Metals excluding gold, such as copper, are up by 7 percent from 2021, while wheat has surged upward by 33 percent. «In the current juncture, where the need for inflation hedges is more elevated, it is conceivable to see longer-term commodity allocations eventually rising above 1 percent of total financial assets globally, surpassing the previous highs seen during 2008 or 2011,» said the JPMorgan note.

Commodities in those categories could see another 30 to 40 percent upside from current levels, according to the bank’s experts, who said that while investors have increased their allocation to commodity assets over the past year above historical averages, they have plenty of room to overweigh them in their portfolios.

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Source: Bryan Jung | The Epoch Times