After enduring a multi-year decline marked by persistent lower highs and lower lows, the Bloomberg spot commodity index transitioned into a prolonged sideways consolidation.
A decisive shift out of this consolidation arrived in October, when the index broke out to a fresh three-year high. What makes this development especially notable is the behavior that followed. Since that initial October breakout, the index has registered 10 additional new highs over the past six weeks, a clear sign that the trend has turned decisively upward from neutral.
What may make this breakout even more significant is the broader secular backdrop. The rapid expansion of artificial intelligence, data centers, and electrification technologies is increasing demand for key industrial and energy-related commodities. If these structural trends persist, the index’s breakout could represent not just a technical turning point but also an early reflection of a new, AI-driven phase of commodity consumption.
A clustering of 3-year highs in a short span for the Bloomberg spot commodity index can look decisively bullish, but historically it hasn’t guaranteed a clean or durable uptrend. While the index was higher roughly 73% of the time nine months later, the path to that gain was rarely smooth.
A critical question right now is whether this time is different, given the emergence of a potential catalyst that could drive a powerful wave of artificial demand for industrial and energy commodities. Unlike typical cyclical upturns, this catalyst could create a structural pull on resources that mirrors the 1940s, when World War II–related mobilization generated massive, coordinated demand across metals, energy, and manufacturing capacity. If a similar demand shock materializes today—whether through industrial policy or large-scale infrastructure and technology initiatives—it could reshape commodity dynamics far beyond what traditional business-cycle models would imply.
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