The European Central Bank’s decision to launch a large-scale programme of government bond purchases under quantitative easing (QE) is unlikely to provide a major boost to the prices of global commodities – even gold. Developments in emerging economies are far more significant to many commodities. Nevertheless, the impact should still be marginally positive as it should help prevent a major consuming region from tipping into a dangerous deflationary spiral.
There are signs that oil prices are stabilising as US rig counts fall and global investment plans are abandoned or postponed. What’s more, the latest global business surveys indicate that economic activity is picking up again. Meanwhile, the death of Saudi King Abdullah shouldn’t have a major impact on prices as it is unlikely to shift the Kingdom’s oil policy away from protecting market share. Elsewhere, precious metals have had a good week, particularly gold and silver.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services