Pickering contends that gold’s sensitivity to interest rates makes it a poor defensive asset during periods of persistent inflation. While gold may react to monetary uncertainty, it does not drive the economy. Conversely, energy, industrial metals, and agricultural commodities serve as fundamental inputs for global growth. These sectors are currently benefiting from three major catalysts: the rise of the emerging-market middle class, the global energy transition, and the massive infrastructure requirements for artificial intelligence and data centers.

Central banks are struggling to curb this inflation, as higher interest rates can reduce demand but fail to address rising production costs for energy and raw materials. Pickering notes that the world has entered a phase where annual inflation of 3% to 4% is becoming the new normal. His firm’s strategy currently favors commodities like copper, corn, and petroleum products over gold and silver, which the fund exited following recent price volatility. Ultimately, Pickering suggests that investors prioritize price momentum over economic forecasts, maintaining a diversified portfolio that can withstand the structural shifts of a commodity supercycle that may last for two decades.