Before the war in Ukraine began, we brought gold to your attention.
We said that despite the rise of alternative assets like crypto, it’s still relevant. And that investors who want to protect themselves from rampant inflation need to put it on their radars.
“Inflation pushed the price of gold up this year.
But does it still have any upside?
In our view, it could be the case.”
As of writing, gold has appreciated by 5% since that article was published. In our view, this confirms that our outlook was correct.
But there are other ways to play the chaos in global markets.
And we are going to tell you about it in a moment.
What’s The State of the Market?
The events in Ukraine have started another period of volatility.
The S&P 500 has been down about 11% since the beginning of the year.
The market has been volatile so far this year. But the sectors that The Financial Star focuses on, such as the commodities sector, have been one of the best-performing ones.
Crude oil has been up 37% since the beginning of January.
Uranium is up 38% over the same period.
The “green” metals have held up very well, too.
Copper is up 4%, aluminum is up 19%. Nickel has soared by 127%.
Commodities have been a great hedge against inflation in the past.
And as inflation is again running at multi-decade highs, they are providing benefits to the investors who have paid attention to them since the start of the year.
The US economy is witnessing high inflation, which may not go away soon.
The latest sanction packages against Russia could slow down economic growth, however.
Right now, the market isn’t sure how to process the combination of high inflation, potentially slower growth, and the risks posed by the Ukraine conflict.
But it’s quite clear that several trends are emerging…
Watch These Trends to Profit from Chaos
The biggest trend of this year isn’t the war in Ukraine.
It’s the acceleration of the global “green push.”
Europe wants to wean itself off Russian natural gas. Over the next nine months, it could drive its consumption of it down by two-thirds.
The US and the UK have banned Russian oil.
Germany committed over $200 billion to accelerate its renewable energy goals. Instead of 2045, it’s likely that the country will achieve its green goal ten years earlier.
But governments aren’t the only ones transitioning to renewable energy and greener solutions.
The demand for electric vehicles is growing. This year, there could be over 10 million EVs sold globally.
China and Europe remain the most important markets, but this year the US could be one of the main engines of growth.
The reason is high oil prices. And, as a result, higher gas bills.
As more Americans see their gas costs soar (which has already been happening), they will consider purchasing an electric vehicle.
And experts agree that oil could go higher still this year. The full impact of the Russian sanctions is still not clear. But, in our view, there’s no scenario where oil prices could dramatically fall this year. The same applies to natural gas.
The world feels the need to electrify and “clean up” its economy.
This is what’s driving the prices of copper, aluminum, nickel, and other “green metals” upwards.
And, in our view, this trend will continue for years if not decades.
Not a lot of investors are paying attention to it now, being fixated on the day-to-day updates from Ukraine and high inflation numbers.
But here at The Financial Star, we watch long-term wealth-creating trends. And the “green revolution,” which we have been covering for a while now, continues. And accelerates.
We urge you to pay attention to this trend.
Thank you for your loyal readership,
The Financial Star team