Although we anticipate a strong global economic recovery in 2021, our forecast of a slowdown in China’s economy means that we still expect industrial metals prices to end the year lower. At the same time, a stronger US dollar and rising US Treasury yields, in both real and nominal terms, will weigh on the prices of all metals, but particularly gold. Admittedly, we expect investor risk appetite to remain high and equity markets to do well, but a stronger dollar and higher yields should mean that investors’ appetite for non-interest-bearing commodity assets will wane.
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