Commodity super cycle to continue for 3-4 yrs, expert Ajay Bagga tells Anil Singhvi; current correction orchestrated by China

Market analyst Ajay Bagga advises investors not to make new investments in commodities now. Speaking to Zee Business Managing Editor Anil Singhvi, Bagga said that there has been a 3-5 per cent correction in the prices of commodities recently. 

He attributed the correction to the role of China which initially acted to trigger the prices and is now orchestrating corrections when people have made their positions. He cited example of US maize production which is expected to come in the next 3-4 months. Around 37 per cent of which has been bought by China.  

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The do this even with the currency, he further said. 

Commodity Indicators 

Bagga said that the commodity super cycle is expected to continue for another 3-4 years. Inflation will trigger an upward trend in the prices of commodities going forward, he added. It is also not the case that US Dollar will appreciate remarkably, he said adding that the fundamentals are weak now.  

The US Fed is also deliberating on when to stop buying bonds. The decision is unlikely to come before December, he said.

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#BazaarKiBaat | कमोडिटी की कीमतों में 3-4 सालों तक उछाल जारी रहेगी, डॉलर के फंडामेंटल कमजोर हैं... अभी तेजी के कोई संकेत नहीं: अजय बग्गा, ग्लोबल मार्केट एक्सपर्ट#USMarket #Commodities #Dollar @AnilSinghvi_ @Ajay_Bagga pic.twitter.com/Hyy67BcGXY

— Zee Business (@ZeeBusiness) May 20, 2021

He also said that the US Fed realises that the existing inflation is temporary. Also, the economies are still not growing enough and it has been the situation for over 2 years now.  

He also said that it was unlikely that the rates would go up anytime soon. He said that the structural issues in the economies due to deflations have become huge now.