This is a chart post. All materials prices are now way off their peaks, many having retraced the entire manic phase from 2005-2008. Shipping costs are down, too. This is what deflation (aka credit contraction) does.

Here first are the grains (charts from CBOT):

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Metals now. All charts from Kitco.

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Here is the Baltic Dry Index, a measure of the cost of shipping dry bulk materials (Bloomberg):

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Given the strength of the declines in other commodities, I am now calling for $500 gold, not $600, and I am not ruling out $400. Everything else should continue to fall as well. To hedge against the big inflation/currency failure that will follow this deflation, you could buy any commodity or basket of them, but gold’s density and liquidity make things easy.

Gold is a form of money, so it is logical that in deflation it should rise relative to other commodities, even while falling relative to paper for a while. This is setting up as the perfect opportunity to exchange fiat money for the real thing, just before the fiat fails.