Commodities Supercycle As Capex And Policy Regime
Sources: 1 • Confidence: Medium • Updated: 2026-04-11 18:58
Key takeaways
- Jeff Currie argues commodity demand is being structurally boosted by deglobalization, electrification, and redistribution-focused fiscal policy that shifts spending toward commodity-intensive consumption.
- Patrick Ceresna says the 10-year yield approaching 4% is a critical test, with the key signal being whether yields rebound sharply as in prior breaks below 4% or remain suppressed, implying a different rate regime.
- Jeff Currie claims deglobalization has escalated into the weaponization of critical minerals and energy flows via sanctions and export controls, and that this dynamic is contributing to gold demand via de-dollarization.
- Erik Townsend says crude oil’s mid-to-high 60s price level reflects a geopolitical premium tied to Iran uncertainty, and that prices could fall back to the low 60s/high 50s if an Iran strike comes fully off the table.
- Jeff Currie attributes gold strength to both de-dollarization pressure from sanctions risk (accelerating after the 2022 seizure of Russian central-bank assets) and investor debasement hedging, framing the theme as distrust of fiat currencies rather than the dollar alone.
Sections
Commodities Supercycle As Capex And Policy Regime
- Jeff Currie argues commodity demand is being structurally boosted by deglobalization, electrification, and redistribution-focused fiscal policy that shifts spending toward commodity-intensive consumption.
- Jeff Currie expects the commodity bull market that began in 2020 to reassert and become larger into the late 2020s.
- Jeff Currie attributes the supercycle’s supply-side foundation to prolonged underinvestment since 2014 that left thin project pipelines across oil, refining, and metals such as copper.
- Jeff Currie claims metals have outperformed since 2020 while hydrocarbons and agricultural commodities were suppressed because policymakers prioritized lowering inflation and maintaining affordability.
- Jeff Currie describes multi-decade rotations between asset-light booms and asset-heavy booms as primarily CapEx cycles.
- Jeff Currie argues commodity supercycles manifest as repeated sharp price spikes and collapses that discourage long-term investment and increase volatility, especially in silver and energy-related contracts.
Near Term Watch Items Technical Levels And Macro Triggers
- Patrick Ceresna says the 10-year yield approaching 4% is a critical test, with the key signal being whether yields rebound sharply as in prior breaks below 4% or remain suppressed, implying a different rate regime.
- Near-term macro catalysts to watch include the upcoming PPI release and next week’s ISM PMIs, retail sales, and jobs data.
- Erik Townsend warns that if the S&P 500 breaks below its 100-day moving average and fails to hold, the next obvious support is the 200-day moving average around 6,600.
- Patrick Ceresna flags the ~6,800 area on the S&P 500 as containing systematic-trading tripwires and says bulls need to keep price above the 50-day moving average to preserve the primary uptrend.
- Erik Townsend and Patrick Ceresna describe DXY ~98 as a critical fulcrum, and they suggest a U.S. strike on Iran could be near-term bullish for the dollar.
- Erik Townsend calls gold’s move above 5,166 (the 61.8% retracement of the prior correction) unexpectedly significant, and says a weekly close above 5,166—ideally above 5,200—would signal faster upside resolution of the correction.
Geopolitics Sanctions And Stockpiling As Demand
- Jeff Currie claims deglobalization has escalated into the weaponization of critical minerals and energy flows via sanctions and export controls, and that this dynamic is contributing to gold demand via de-dollarization.
- Jeff Currie argues globally synchronized disinflation in 2022–2023 occurred despite strong commodity demand because governments implicitly expanded supply by tolerating sanctioned barrels, loosening immigration to restrain wages, and relaxing constraints on food production.
- Jeff Currie asserts broad-based commodity hoarding is occurring globally (not only in China) due to supply-chain insecurity, sanctions risk, and tariff fears, including large movements of copper into COMEX inventories.
- Jeff Currie expects the 2022–2023 affordability-suppression tactics he described will be harder to repeat, increasing future upside risk in hydrocarbons and food when the cycle turns.
- Jeff Currie expects commodity hoarding behaviors can persist for many years once initiated.
Oil Pricing Dispute And Market Microstructure
- Erik Townsend says crude oil’s mid-to-high 60s price level reflects a geopolitical premium tied to Iran uncertainty, and that prices could fall back to the low 60s/high 50s if an Iran strike comes fully off the table.
- Jeff Currie disputes the popular “oil glut” narrative.
- Jeff Currie cites lower OECD inventories year-over-year, backwardation in the oil curve, and wide refining margins as indicators inconsistent with an oil glut despite weak flat price action.
- Jeff Currie attributes the disconnect between bullish oil fundamentals and weak flat prices to algorithmic and trend-following flows trading on sentiment while liquidity is drained and fundamental verification is costly.
- Jeff Currie expects a tipping point where oil prices can no longer be held down by sentiment and liquidity dynamics, with escalation involving Iran cited as a possible catalyst.
Gold As Geopolitical Reserve And Fiat Distrust
- Jeff Currie attributes gold strength to both de-dollarization pressure from sanctions risk (accelerating after the 2022 seizure of Russian central-bank assets) and investor debasement hedging, framing the theme as distrust of fiat currencies rather than the dollar alone.
- Jeff Currie disputes the framing that the dollar is uniquely the “bad actor,” arguing that fiat currencies as a class are being treated as the problem.
- Patrick Ceresna argues gold is increasingly behaving as a geopolitical reserve asset rather than a simple inflation hedge in a sanctions-heavy world with weaponized supply chains.
- Jeff Currie expects silver to outperform gold over the long run because it combines monetary demand with electrification-linked industrial demand.
Watchlist
- Near-term macro catalysts to watch include the upcoming PPI release and next week’s ISM PMIs, retail sales, and jobs data.
- Erik Townsend warns that if the S&P 500 breaks below its 100-day moving average and fails to hold, the next obvious support is the 200-day moving average around 6,600.
- Patrick Ceresna flags the ~6,800 area on the S&P 500 as containing systematic-trading tripwires and says bulls need to keep price above the 50-day moving average to preserve the primary uptrend.
- Erik Townsend and Patrick Ceresna describe DXY ~98 as a critical fulcrum, and they suggest a U.S. strike on Iran could be near-term bullish for the dollar.
- Erik Townsend says crude oil’s mid-to-high 60s price level reflects a geopolitical premium tied to Iran uncertainty, and that prices could fall back to the low 60s/high 50s if an Iran strike comes fully off the table.
- Erik Townsend calls gold’s move above 5,166 (the 61.8% retracement of the prior correction) unexpectedly significant, and says a weekly close above 5,166—ideally above 5,200—would signal faster upside resolution of the correction.
- Patrick Ceresna says the 10-year yield approaching 4% is a critical test, with the key signal being whether yields rebound sharply as in prior breaks below 4% or remain suppressed, implying a different rate regime.
Unknowns
- How large is the claimed post-2014 underinvestment in oil/refining/metals relative to depletion and demand growth, and where are the tightest bottlenecks (mines, refineries, grid, LNG, etc.)?
- Are deglobalization/electrification/redistribution policies translating into measurable, sustained increases in commodity intensity of spending (versus one-time programs or substitutions)?
- What is the empirical magnitude and persistence of the asserted global commodity hoarding (including the copper flows into COMEX), and what share is commercial inventory versus strategic stockpiling?
- Which parts of the 2022–2023 disinflation mechanism described (sanction tolerance, immigration-driven labor supply, relaxed food constraints) are actually reversible, and under what political/geopolitical conditions?
- Does the oil market’s cited tightness (inventories, backwardation, refining margins) persist, and does it eventually pull flat price higher as claimed, or does the ‘glut’ narrative reassert with confirming evidence?