Gold Is On A Run, But USCF’s John Love Has His Eye On Cattle And Copper

Just a handful of metals soak up the lion’s share of attention from the popular media. Gold itself is now the second most popular reserve currency for central banks, having surpassed the euro last year.

But as with other classes, diversification is important. “There is no magnificent 7” in commodities, says John, referring to how lesser followed commodities can break out for structural reasons. After poor harvests in the Ivory Coast and Ghana, cocoa had a breakout 2024. More recently, copper has seen a surge in demand thanks to the power needs of AI. 

What commodities are best positioned from here? Our interview with John Love, commodity expert and president and CEO of USCF, endeavours to find out.

Q: It feels like every month there has been a new shock wave rippling through the global economy, what is on your radar most these days?

A: Tariffs, inflation, and the US debt level. The US economy is facing an unprecedented level of disruption in a short period of time. Will the net effect of all these changes be positive, negative, or neutral? In particular, will tariffs reduce global trade and permanently increase prices? Businesses are already feeling the effects of tariffs, but other changes may offset or reduce negative impact to their bottom lines. What happens if price increases flow through to consumers at a greater rate? Central Bank capture would limit the Fed’s role in containing inflation. Lower rates would help service the debt, but Congress and the Executive Branch will probably just take advantage of lower interest payments to spend more, exacerbating the problem.  

Q: Farmers in the US have been hit by the tariff wars, how does that impact commodity pricing and portfolio construction?

A: Our broad commodity ETFs, SDCI and USCI, effectively look for commodities where the supply/demand balance is out of sync.  If demand exceeds supply, or looks likely to do so, our system favors those commodities. On the flip side, we try to avoid the commodities where the balance leans towards excess supply. The strategy is systematic, it doesn’t change based on current events, but current events could influence what commodities the system picks. Although bad for farmers and some agricultural products, tariffs don’t affect all ags equally, and often trading relationships change as supply chains adjust.  Additionally, other factors come into play that can offset tariffs.  For example, US cattle herds are the smallest they’ve been in decades – as a result, cattle futures are up substantially in 2025.  

Q: Coffee futures represent a strong allocation in some of USCF’s ETFs, how do you think about the drivers there? 

A: Heat and drought have negatively impacted coffee supply over this decade.  Over the last five years, coffee futures are up more than 25% on an annualized basis.  Price gains accelerated in late 2024, were knocked down by tariffs, and have recovered dramatically, largely due to ongoing drought in Brazil.  This market may remain volatile as tariffs and weather continue to impact prices.

Q: Gold has continued a slow but steady march higher, do you think that continues?

A: Yes, but likely more muted unless another serious financial shock occurs or the US and/or world fall into recession. In a new age of power struggles among nations, central bank buying of gold is likely to continue. Likewise, nervous investors are likely to keep adding gold to their portfolios over time. When something is at all time highs, the question is always whether it’s overvalued or can continue.  

Q: What are you most bullish on from a commodity perspective?

A: Copper and cattle.  Cattle for the reasons stated above.  Copper because we need more of it,  that need keeps increasing (e.g. AI power needs), and there isn’t enough of it readily available or likely to become available in time to meet demand.  

For most investors, broad commodities are usually the way to go, as timing single commodities requires finesse. A broad allocation has historically provided a strong diversification benefit, an inflation hedge, and exposure to all of these uncorrelated markets that may have their own day in the sun, like cocoa last year and cattle this year.  

Q: What are some trends that no one is talking about?

A: Again, cattle.  Last year, cocoa.  Investors rarely notice the non-headline commodities.  Crude oil is the most traded commodity, perhaps the most well known after gold, but there’s no reason it should (or shouldn’t) be the top performer at any given time.  There’s no Magnificent 7 in commodities.  They can all be magnificent at times.  The art – on average and over time – is to avoid the mediocre and identify the magnificent.

Thank you John, that was great.

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