If It’s Underground, Maybe Its Price Is, Too
Many resources that are mined and extracted have dropped significantly in price this past month. Resources anywhere from gold, silver, oil, aluminum and copper have seen a dip in prices. During the financial crisis many commodities and resources have rose in value. However, this past month shows otherwise.
When looking at year 2000 to March, you can see a general rise in gold prices, copper and oil, which they called a “supercycle.” Many expert economists believe we are entering a phase of declining prices for those resources. Although most economists suggest we are currently going to see falling prices, they have very different views for the future. Professor Jacks teaches economics at Simon Fraser University in British Columbia and believes that since most commodities are finite, population pressures and industrial growth will eventually rise the costs of the limited resources. Mr. Jessop, who is the chief global economist and head of commodities research for Capital Economics in London, on the other hand believes gold will recover while the other commodities will decline for a period of time. Mr. Jessop believes this because gold is often used as an alternative to currencies.
This affects us directly as the consumption of oil and other finite resources happen in our daily lives. This dip in prices could essentially save us some money.