Physical commodities may be entering a new supercycle from the beginning of 2022

The US Energy Information Administration reported in early January 2022, that while energy prices in the S&P Goldman Sachs Commodity Index (GSCI) ended 2021 59% higher, most other commodity indexes included in the GSCI increased by about 20%. Sharp price increases were largely driven by increased demand from the initial phase of global economic recovery from the COVID-19 pandemic. Goldman Sachs also seems very bullish on commodities even projecting a long supercycle for years to come.

The last time physical commodities were in a supercycle was in the 2000s when commodities were rocketing to their all time highs. This supercycle fizzled to an end at the end of that decade. In October 2012, Goldman Sach's Jeff Currie, then a commodities analyst, now the global head of commodities research observed at the London Metal Exchange meeting that the collective assets under management were the lowest they had been in a decade in commodities focused hedge-funds and the average commodity fund in 2012 was on track to lose close to 3%.