(Kitco News) - In a rapidly changing global economy, commodities are positioned for a massive surge, according to Philippe Gijsels, Chief Strategy Officer at BNP Paribas Fortis.
Speaking in a recent interview with Kitco News, Gijsels emphasized that we are still in the early stages of a long-term bull market for commodities. "I think we're still at the very first inning of what will be a major, major bull market in commodities," he said. "A bull market in commodities means prices double, triple, and beyond."
This optimism is underpinned by a number of factors, including persistent inflation, growing geopolitical tensions, and a shift away from globalization. Gijsels noted that governments will continue to rely on inflation as a way to manage their growing debt burdens. With inflation in Europe falling below 2%, and an expected ECB rate cut in October, inflation is a growing concern globally. “The only way to manage this massive government debt is through inflation," he pointed out, adding that governments will likely aim to maintain inflation at around 3-4%, which could significantly erode purchasing power over the long term. Gijsels warned that this could result in the loss of "half your purchasing power over 10 years," making real assets such as commodities increasingly attractive for investors.
A critical driver of this commodities boom is the restructuring of global supply chains. Gijsels highlighted the shift from globalization to what he called "multi-globalization," where supply chains are becoming shorter and more localized, particularly in key sectors like defense, climate change mitigation, and industrial production. This transition is boosting demand for key metals like copper, cobalt, and lithium. Copper, in particular, stands out as a vital commodity for the future of energy infrastructure. "I’m a big bull on copper," Gijsels said, predicting the potential for copper prices to double as the world moves from "big oil and big gas to big shovel."
Recent market data supports Gijsels' view. Copper futures rose by 1.5% today, with analysts projecting further price increases as demand outpaces supply. Despite a weakening global economy, Gijsels remains confident in the structural forces that will continue to push commodity prices upward, predicting that the next phase will see mining equities catch up with rising metal prices. "The miners have not yet really followed the commodity price rises we’ve seen recently. I think that will be the next step in the bull market."
With inflation concerns, rising demand for metals, and central banks continuing to cut interest rates, Gijsels believes this commodities boom is only just beginning. To hear more about Philippe Gijsels' outlook, watch the full interview on Kitco News.