Major Commodities Undervaluation vs. Gold Signals Market Trough

Global commodities, excluding gold, are trading at their lowest relative levels to gold since the Global Financial Crisis, according to macro strategist Otavio “Tavi” Costa of Crescat Capital. The chart highlights periods in 2009, 2016, 2019, and now 2025 where commodities drastically underperformed versus gold, marking prior cyclical lows.

Costa’s analysis shows a sharp undervaluation: the ratio of the equally-weighted ex-gold commodities index divided by gold is at a multi-year low. Historically, similar troughs in 2009, 2016, and 2019 signaled commodity bottoming and the onset of rallies.

Markets are now anticipating over 50 bps of Fed interest rate cuts by year-end, while U.S. inflation data is expected imminently. With inflation pressures persisting, the Fed may lean dovish, fueling commodity demand via lower real yields.

“Valuations are as compelling as they were during the global financial crisis,” Costa told Kitco, projecting that we’re at the beginning, not the end, of a commodity supercycle. He further noted the lagging silver-to-gold ratio (~90), historically a bullish signal for silver’s upside potential.

“Safe-haven demand is returning amid trade uncertainty,” said Kelvin Wong, senior analyst at OANDA, noting that gold may push toward $3,435 next if it sustains above $3,360.

The extreme undervaluation of commodities relative to gold presents contrarian opportunities. Should inflation accelerate alongside a dovish Fed pivot, and perhaps under new leadership, the combination may mark a rare window to rotate into resource-heavy assets at cyclical lows.