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Commodities Rise

Elijah Jumper, C'26

graphic of oil prices

Hello everyone! This is the 8th and final blog post I'll be writing for the semester that revolves around the topic of finance. My next blog post will be the final one for the semester and will just be a recap of the semester. Nonetheless, this week’s blog post will be a great one to cap off with, as it focuses on commodities. One of these commodities being something we all deal with every day.

Before diving into the two focal points of this week’s blog post, the definition of commodity should be clarified. A commodity is a basic good that can be interchanged in the economy for other commodities, currency, or anything worth value. Some common examples of commodities are oil, lumber, gold, and wheat. In this post, I’ll be speaking on oil and gold.

Oil prices have been rising steadily over the last few months. The price of oil per barrel, which is how it’s measured, rose over $90 last week and is now approaching $100 a barrel. This rise in oil prices began with a tightening of the supply of it across the world. Many oil suppliers predicted a recession to take place, so they decided to cut the supply of oil. It’s believed that in times of recession, people try to travel less to save money. Large oil companies usually respond to this by tightening their supply, so they don’t have a surplus of oil. After tightening the amount of supply, prices rose as the demand for oil stayed consistent.

The significant rise in oil prices is being examined by investors, especially those that invest in commodities. If you were invested in oil, you’d be doing very well now. Although, as said earlier, oil prices and supply can be used as signals for what to expect in the economy. This is also a topic that affects everyday consumers, not just investors. As everyone has seen in the last few weeks, gas prices have been rising. The rise is a direct result of the rise in the price of oil. So, this topic is also important for regular consumers to understand.

There is a second commodity that has been on a great rise recently as well: gold. Gold just hit an all-time high this week, priced at $2,355 per ounce. This is like oil in that it holds significance for multiple reasons. The first being that gold is a regularly held and traded commodity for investors. With the rise in price, it’s evident gold is doing well. Additionally, gold is also an indicator at times of a recession. Many times, the price of golf soars directly before and at the beginning of a recession, as it is seen as a hedge against crashes. I believe that this could be a sign that many investors are stocking up on gold to hedge their losses against a looming recession.

Thank you for reading this final blog post focused on finance!

Elijah Jumper, C'26