As global living standards continue to rise, demand for food, energy and metals is increasing exponentially. In July, food prices hit the highest levels ever recorded, while in May, oil prices rose to $125 a barrel, the most expensive since 2008. In August, gold topped $1900 an ounce, as investors sought safe havens from depressed equity markets.
In a circular case of cause and effect, higher commodity prices have boosted inflation in commodity-producing countries, leading to hikes in interest rates, which in turn have attracted waves of global capital seeking carry-trade returns.
