The Commodity Bull Market Is Broadening | Jim Wiederhold on Copper, Grains, and Bloomberg Commodity Index
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Today's episode is brought to you by the Tucrium Corn Fund, ticker c o r n. Let's get into it. Joined today by Jim Wiederholt, commodity indices product manager at Bloomberg. Jim, great to see you. Welcome to Monetary Matters.
Hey, Jake. Thanks. Thanks for having me here.
What's been going on in the commodity complex this year? What's your outlook going forward? I know there's a lot of different drivers. I mean, there's there's I think AI is is a is a very big driver in terms of, like, copper and silver and then maybe natural gas. But what do you think are the big drivers this year?
Overall, there's just a clear ton of tailwinds for the commodities asset class. So not only on the demand side, like you said, with AI, where we data center build outs, which require a lot of metals, power, energy to do that, but also just general macro themes that are really taking hold this year. They've been in place over the last few years, but basically, if you look back to the 2010s, we were in a completely different environment where we had low inflation, low rates, low volatility, a continued globalization theme that basically peaked out a few years ago. So that meant that commodity pr
So at the beginning of the year, you had a great call. You said that industrial metals like copper, zinc, etcetera, were gonna outperform precious metals, gold, and then also silver. Why did you make that call and that that call has worked out really well? Do you expect that trend to continue?
The the precious metals, gold and silver, you know, they're they're definitely more scarce just by definition of their name, and and they did have a nice run over the last two and a half year period. Gold tends to do that historically. When when it goes on these moves higher, it tends to be two and a half, three year period. We saw that we we saw a big spike in January with gold and silver, and it's come off. So there was definitely a pullback in central bank buying, at least initially, although that's changing with the latest World Gold Council surveys with more expected buying ahead. But whe
My understanding of the copper demand supply story is as follows, and I I'm curious if you agree or, you know, correct me if if if anything is wrong, is that there is a huge demand surge from electric vehicles, but particularly the the, you know, green energy, solar, and wind and the wiring associated with that. Data centers are also a tailwind. I think, though, that the the demand like, the the bull case relies on the demand side, but also on the supply side. Because, like, in 2000, we had a huge demand surge from China and and basically building tons of buildings around around China. But the
There's always potential for especially with increased prices and when you have a very high price for any commodity that incentivizes production. So people have planned greenfield mines coming on and especially if there's a huge profitability potential, they're going to do everything they can to make sure that things come online. And this is something that the copper price was kind of meandering a few years ago. And especially in The US, had the whole ESG push. Obviously, that's completely reversed its head now, but the rest of the world was still moving more towards renewables. So there was i
What is kind of the short term data on just how much the demand has gone up versus supply has gone up within copper?
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