Do Commodities’ Prices Signify a Recession is on its way?

• The Russia-Ukraine war has sparked a drastic spike in the prices of commodities, which is signaling a situation of recession.

• The futures prices are witnessing the highest ever level, says the CEO of Compound Capital Advisors, Charlie Bilello. 

• The Crypto industry would be significantly affected if a recession is to show up.

The war between Russia and Ukraine has sparked drastic changes globally. It has not only added concerns related to life but also further survival. Concerns have been raised regarding a potential wave of recession, and the prices of commodities are witnessing peaks.

The prices of commodities are the most sensitive area of any economy that gets hit first with any global crisis. Red flags start to show up when these prices start skyrocketing. The Covid 19 pandemic is just not entirely over, and the war just acted like a cherry on the cake. 

One of the key areas affected are the crypto markets and stock market, which started to degrade again this Monday, and on the other hand, the prices of commodities are taking a flight.

Commodities’ prices seeing new heights:

Goods utilized in commerce that are interchangeable with other goods are called commodities. For instance, precious metals, grains, oil, gas, etc., are all witnessing a surge, and analysts have started to believe there’s a recession on the way. 

According to Charlie Bilello, the CEO of Compound Capital Advisors, the futures prices are seeing the highest ever levels. He highlighted the Gasoline futures hit an All-time low two years ago and that now it is witnessing an All-time high crossing the last 2008 high. 

Bilello further observed that the futures of precious metals like palladium have also hit an ATH, given the fact that Russia is the largest producer contributing to 40% global supply.  

Whereas, prices of other commodities like corn and soybeans have hit the highest level since 2012, and wheat has been highest since 2008. Russia is again the largest supplier of wheat. 

Gold prices are witnessing their highest level since August 2020 and are just 2.9%, far from setting a new record of reaching a peak. 

Though if we talk about the dominant cryptocurrency, Bitcoin, it is not acting as an asset of value. It has been seeing a downtrend lately and is down by around 45% from its all-time high last November. If the talks of the upcoming recession prove to be accurate, the crypto industry might just fall into a prolonged bearish market. 

The world is highly distressed by this war situation. It is to look forward to what the future holds for the various sectors affected. 

ALSO READ: NFT Sales Dives Down 29% In The Week, Slippage In Global Search For The Term

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.

Latest posts by Steve Anderrson (see all)