The Inevitable Commodities Supercycle: Why Gold Is Leading the Charge

The quiet whispers of the next great financial shift are not coming from Wall Street or from Silicon Valley. They are emanating from the ground — literally. 

The commodities market, long overlooked in favor of high-flying tech stocks and volatile cryptocurrencies, is stirring once again. And if history is any guide, this awakening is not just another bull run — it’s the dawn of a long-term commodities supercycle.

While we were all over the technology boom well before the never-ending Wall Street drumbeat about AI, quantum computing, and cryptocurrencies, we’ve also been leading the charge about the coming commodities supercycle. Again, well ahead of Wall Street.

We identified the first impact tremors from a coming commodities bull market as early as the start of 2021 here and here.

At the helm of this movement is gold, the age-old barometer of economic instability and inflationary pressure.

The Silent Rally of Gold

While the world fixates on AI stocks and Bitcoin, gold has methodically broken into new all-time highs, not just in U.S. dollars, but across nearly every major currency — EUR, AUD, CAD, GBP, JPY. This isn’t just a rally. This is a breakout from the financial system itself.

Here’s a 1-year chart and 5-year chart of gold versus the U.S. dollar, the Dow, and the S&P 500:

Notice anything?

Gold kept pace with the markets for the last five years, but has started to separate itself from the pack over the last 12 months.

Something is happening. But what?

Historically, when gold moves like this — across all major fiat currencies — it is a stark warning that the global financial order is buckling under stress. Gold doesn’t rally in isolation. It moves when central banks are failing, when sovereign debt reaches unsustainable levels, and when inflation becomes too big to hide.

Central banks around the world, from China to Russia to Turkey, are hoarding gold at record levels. Why? Because they know what’s coming.

The Gold-to-Silver Ratio: A Ticking Time Bomb

The gold-to-silver ratio is one of the most reliable indicators of monetary stress. Historically, this ratio averaged 15:1, meaning 15 ounces of silver were worth 1 ounce of gold. Today, that ratio sits near 80:1 — a glaring signal that silver is significantly undervalued relative to gold.

When the ratio corrects, it doesn’t move gradually. It snaps violently. The last time silver exploded (2011), it shot from $18 to $49 in a matter of months. A similar move today would send silver past $100 per ounce.

To wit: Investment bank UBS just raised the stakes — big-time. The Swiss banking giant now sees silver hitting $38 per ounce within the next 12 months, and they’re not making this call lightly. They’re betting on gold’s relentless rally and a resurgence in global industrial demand to push silver sharply higher.

But here’s where it gets even more interesting. UBS is holding firm on its gold target of $3,000 per ounce by year’s end — a number that, just months ago, would have sounded aggressive. Now? It’s looking conservative. In a more extreme macroeconomic scenario, they admit gold could blast past $3,100 or even $3,200 per ounce.

I think their predictions are low. I have silver hitting $40 this year… and $56.60 by 2027!

This is a wake-up call for anyone still sitting on the sidelines.

• Gold is surging because of central bank demand, runaway debt, and geopolitical instability.
• Silver is gearing up for an explosive move, riding both the precious metals rally and a rebound in industrial production.
• Investors are scrambling for safe-haven assets, and the smart money is already moving.

Silver isn’t just a shadow play on gold — it’s an entirely separate juggernaut with a different driver: industrial demand. With AI, electrification, and green energy requiring massive amounts of silver, we could be looking at the early innings of a historic price squeeze.

That’s why we continue to like Silvercorp Metals (NYSE: SVM) while it’s still trading below $4 a share.

Take a look at this chart. It's a year-to-date chart that compares SVM — a silver mining stock — to SVL, an ETF that holds physical silver. Silvercorp Metals is outperforming the physical silver by 2-to-1! 

This UBS forecast isn’t just a prediction — it’s a road map for what’s coming. Ignore it at your own risk.

For investors, this is a historic opportunity.

The FTSE/CoreCommodity CRB Index: A Supercycle in the Making

Gold’s breakout isn’t happening in a vacuum. The FTSE/CoreCommodity CRB Index — a broad measure of commodity prices — is approaching record highs.

This index tracks energy, agriculture, industrial metals, and precious metals. If it breaks through its long-term resistance, it would confirm what many investors fail to see: We are in the early innings of a multi-year commodities bull market.

History Lesson:

The last time commodities entered a true supercycle was in the early 2000s, when China’s industrial expansion drove massive demand for oil, copper, and steel. Today, we have a new set of drivers:

• A weakening U.S. dollar due to unsustainable national debt.
• Artificial intelligence and EVs demanding vast amounts of copper, lithium, and rare earths.
• Global resource nationalism restricting supply chains of critical minerals.
• A financial system bloated with debt and fiat money creation.

All of these forces are aligning for a long-term commodity boom.

The Setup for a Historic Commodities Explosion

1. Central Banks Buying Gold at Record Levels

   • China, Russia, and emerging markets are aggressively stockpiling gold to hedge against a weakening U.S. dollar.

2. The Silver Powder Keg
   

   • The gold/silver ratio is completely out of whack. When this corrects, silver will skyrocket.

3. Industrial Metals Demand Surging
   

   • AI, electric vehicles, and green energy are consuming copper, nickel, and lithium at unprecedented rates.

4. Oil and Energy Constraints
   

   • Years of underinvestment in oil and gas are leading to supply shortages, driving prices higher.

5. Government Spending on Infrastructure
   

   • The U.S. and Europe are pouring trillions into infrastructure, fueling demand for raw materials.

What Happens Next?

Supercycles don’t happen overnight. They unfold over decades, grinding higher while latecomers scramble to catch up. The smart money is already positioning itself.

Gold is leading this charge, and history shows that when gold breaks out, commodities follow.

So the question isn’t whether a commodities supercycle is coming.

It’s whether you’re ready for it.

The Prophet of Profit,