Why it's a 'perfect storm' for commodities right now

Gold prices (GC=F) hit a record high today, boosted by increasing geopolitical uncertainty following the death of Iran's president. Blue Line Futures Chief Market Strategist Phil Streible and Wolfe Research Managing Director Timna Tanners join Market Domination to discuss why commodities — including other precious metals silver (SI=F) and copper (HG=F) — have seen such a boost.
Streible explains that when trading commodities, investors need to identify two things: A supply-demand imbalance and market momentum. He says that in the instance of copper, demand is soaring amid a green energy revolution and an artificial intelligence push:
"The combination pushes demand for copper, silver, and other metallic metals higher for the first time in over a decade, and this comes at a time when increased regulation makes it harder for additional supplies of these metals to come into light and end up in the end user's hands. So, it's just creating this global deficit right now. It's a perfect storm for commodities."
"Don't let the facts get in the way of a good narrative here," Tanners warns. "The reality is, this is really a squeeze that's happening in the financial community more than in the physical market," she explains, saying that copper saw a lot of short squeezes.
"When it comes to investing of any type, you always want to manage position sizing, making sure that it's risk capital that's involved," Streible adds. Tanners also notes that investors should be watching China in the commodities market, as its electric vehicle sector skyrockets and new measures to revitalize its property sector have been introduced.
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