Commodity prices have been on a long-term upward trajectory, but history shows this journey is anything but steady. Over the past century, major supercycles—driven by economic booms, wars, and monetary shifts—have fueled sharp price swings.
This graphic expands on the analysis from page 152 of the In Gold We Trust (IGWT) 2024 report, which tracks commodity price movements from 1915 to 2024. The data reveals a clear long-term uptrend, marked by dramatic peaks and corrections. The most recent peak in 2008 was followed by a steep 70% decline, but prices have rebounded significantly since then. If history is any guide, the next peak could surpass previous all-time highs.
What Drives Commodity Supercycles?
🔹 Boom-and-Bust Cycles: From the roaring 1920s surge and Great Depression collapse to the post-WWII reconstruction boom, commodities have soared and crashed alongside global events.
🔹 Inflation & Monetary Policy: Loose monetary policies and inflationary eras—such as the 1970s stagflation, post-2008 stimulus, and 2020s supply chain disruptions—have historically fueled price surges.
🔹 Energy & Metals as Key Drivers: Oil shocks in the 1970s, China’s industrial boom in the 2000s, and geopolitical tensions in the 2020s have all played a major role in commodity price swings.
🔹 Safe Haven in Uncertainty: Commodities, particularly gold, have consistently outperformed during periods of economic instability, inflation, and currency devaluation.
What’s Next?
With inflation concerns, geopolitical risks, and tightening supply chains, are we witnessing the early stages of another commodity supercycle?
As the IGWT report states:
"In previous supercycles, commodities have significantly surpassed their respective all-time highs. We believe that in the current cycle, there is still considerable upside potential for commodities, and after the consolidation phase, price dynamics could resume."
Source: In Gold We Trust report 2024 page 152