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Reset of a lifetime? Commodities guru sounds alarm on 30% crash

Reset of a lifetime? Commodities guru sounds alarm on 30% crash
Ana Zirojevic

Amid complex geopolitical and economic developments around the world, including the falling stock markets in China, some of them might exercise downward pressure on commodities trading, according to the observations by the senior Bloomberg expert in the field, Mike McGlone.

Specifically, the S&P 500’s 10% total return buoyed the Bloomberg Commodity Spot Index’s near 1% gain in the first quarter, but a deflating China exercised pressure, “which could augur 2024 risk leanings,” as the commodities trading expert explained in an X post on March 28.

Preparations for 30% crash?

Moreover, stocks underperforming in China, the top commodity consumer, alongside its diving government bond yield might bring about reversion, as what happened to its “rapid emerging markets, particularly when they upset their top export customers (US and Europe) via ‘unlimited friendship’ with Russia.” 

Furthermore, McGlone observed that:

“Record highs in gold vs. most commodities reentering pre-pandemic ranges is consistent with my view for deflation that typically follows the liquidity and price pumps to the 2022 highs, and the tilt toward a great reset.”

Finally, Bloomberg’s specialist highlighted that West Texas Intermediate (WTI) “crude oil and copper might have neared 2024 highs in 1Q, and a top potential domino-tumbling risk is some back-and-fill in US stocks,” possibly culminating with a “reset of a lifetime” and 30% dive for commodities prices.

Commodities analysis chart
Commodities analysis chart. Source: Mike McGlone

As a reminder, late last year, McGlone also observed the negative effect on commodities coming from escalating geopolitical tensions and other strong influences, which have contributed to the price of gold soaring to a new all-time high (ATH) and Bitcoin (BTC) making a strong bullish rally.

He has also been warning of a giant economic reset for some time, including back in June 2023, when he stressed there was a “deflationary trajectory” that would continue for a year, marking the “beginning of one of the greatest economic resets of our lifetimes,” as Finbold reported at the time.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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