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The prospects for the price of gold remain better than those for most industrial metals, with silver fitting in somewhere in between. … Gold should continue to outshine industrial …
30th October 2013
The supply of copper has risen significantly faster than demand so far this year. This trend should lastwell into next year, adding to the downward pressure on the price of the red metal. We thereforecontinue to expect the price of copper to fall from …
29th October 2013
Much of the surge in US oil production has come from improvements in drilling technology and processes rather than an increase in the number of rigs. These improvements should reduce costs and allow producers to increase output further, while their …
23rd October 2013
Bad weather in West Africa may continue to drive the price of cocoa higher until the rainy season in the spring. But we think over the next few years, a combination of better farming techniques and more investment should boost supply, whilst demand growth …
21st October 2013
Oil prices have been lifted again by hopes of stronger demand and by disruption to supply in the Middle East, but we do not expect these supports to be sustained. The return of supply, currently being constrained by war, sanctions and mismanagement, …
17th October 2013
China’s imports of most major commodities rose in September. But we expect growth in demand for commodities to slow over the next year as China rebalances its economy. … Strength in China's commodity imports likely to be …
14th October 2013
There are several possible explanations for the failure of the gold price to take off despite the prospect that the US government may soon default on its debt. The most plausible is simply that the markets still think default will be avoided. …
10th October 2013
We expect movements in the price of cotton to be driven by policy decisions in China over the next year. A probable reduction in government support for Chinese cotton farmers in 2014 is likely to put downward pressure on the price of cotton in the second …
9th October 2013
We expect the Brent-WTI spread to gradually decrease from about $6 per barrel today to zero over the next year, as logistical constraints in Cushing and Louisiana ease. … Brent - WTI spread to fall back …
7th October 2013
The prices of industrial metals continued falling during the last month, despite more positive economic news from many advanced economies. We think the prices of most industrial metals are likely to drop further as demand from key consumer China remains …
4th October 2013
The Fed’s surprise decision to maintain its current pace of asset purchases for a while longer had little effect on commodity prices. Indeed, the Fed’s caution partly reflects lingering uncertainty about the strength of the US economy, and this has had a …
1st October 2013
After the further sharp falls in corn and soybean prices over the last month we think that most of the new US crop is now priced into the market. However, in contrast to the consensus, we still expect prices to fall a little more over the next year as …
26th September 2013
Industrial metals prices have remained weak today, despite the improvement in the flash PMI for China, which rose to a six month high. We continue to doubt that the rebound in China economy will last, but any slight improvement in demand for metals is …
23rd September 2013
The markets and media have understandably been focused on developments in Syria for the last few months. However, signs of a possible thaw in the relationship between Washington and Tehran could have much larger implications for oil prices over the coming …
We expect global demand for coal to be subdued and prices to fall further over the next few years as major consuming countries, including China as well as the US, take fresh steps to reduce pollution. … The environment looks to be winning the war on …
20th September 2013
After the initial bounce, the Fed’s decision to maintain its current pace of asset purchases for a while longer is unlikely to have any major implications for commodity prices. Precious metals have the most to gain and their prices could rise further in …
19th September 2013
This is the time of the year when the price of gold is traditionally assumed to be boosted by a seasonal pick-up in demand. There does indeed appear to be a seasonal pattern in the gold price but, as the potential for arbitrage would suggest, any calendar …
18th September 2013
In contrast to OPEC, we think that supply outages from Libya and other producers, as well as wider geopolitical tensions, are playing a key role in keeping oil prices high. … If the oil market is well supplied, what's keeping prices …
Despite increasing oil imports by China and other emerging economies, we expect the price of crude to fall as the temporary factors underpinning current high prices are resolved. What’s more, larger increases in supply than demand should ensure prices …
10th September 2013
Crude oil prices are undoubtedly higher than they would otherwise be as a result of disruptions to supply – both actual (notably current outages in Libya) and potential (due to fears of contagion from Syria). However, the flipside is that prices should …
6th September 2013
Despite the dramatic decline in the price of Thai rice over the last month, we still think there is room for further falls. Sales from Thailand’s enormous official stockpiles into an already well-supplied global market should continue to put downward …
5th September 2013
Concerns about the impact of Fed tapering on commodity markets have eased somewhat, partly because of the growing recognition that US monetary policy is likely to remain very loose, and partly because of a greater emphasis on the improving economic data …
2nd September 2013
Copper premiums in Shanghai hit a record high earlier this month but we expect them to fall from around $175 per tonne at present to under $100 over the next six months or so. … Shanghai copper premiums are likely to …
29th August 2013
The recent partial recovery in the price of gold reflects a range of positives. Some of these should be sustained, notably the growing recognition that US monetary conditions will remain loose even after the Fed scales back its asset purchases. Households …
27th August 2013
In the event, the FOMC minutes simply reinforced expectations that the US central bank will start to taper its asset purchases as soon as next month. Instead, industrial metals prices have been buoyed this morning by the flash PMIs for China and the …
22nd August 2013
We expect the LME steel price to rise from around $165 per tonne to $270 by the end of 2015 due to the narrowing of differences between LME and other steel prices and the closure of Chinese capacity. … LME steel prices set to …
21st August 2013
The surge in US oil and gas production in recent years has fuelled expectations that the country could eventually become a major energy exporter. Indeed, the US already runs trade surpluses in coal and in refined petroleum products and should become a net …
Only a small part of the recent run-up in oil prices is due to the turmoil in Egypt. But whatever the reason for the latest jump in the cost of crude, the fragility of the global economic recovery and of financial market sentiment means that prices are …
15th August 2013
We expect iron ore prices to drop from around $144 per tonne currently to $110 by the end of this year and to fall further thereafter, due to escalating supply and disappointing Chinese demand. … Are iron ore prices set to …
14th August 2013
Three macro developments should continue to set the tone for industrial commodity prices in the coming months. The end of the euro-zone recession is only a small positive, while the prospect that the Fed will soon start to taper its asset purchases should …
We think that the prices of US grains and soybeans are still higher than can be sustained by fundamentals, despite the sharp falls last month. … Grain and soybean prices still have further to …
12th August 2013
Despite the introduction of a new support scheme for coffee farmers in Brazil, we expect the price of arabica coffee to fall from around 120 US cents per lb today to 100 by the end of 2014. This is mainly due to weak demand from developed countries and …
9th August 2013
After a year of being pitifully weak, China’s commodity imports rose rapidly in July, in many cases to record highs. This has sparked a rally in commodity prices but we doubt this will be sustained. … China’s commodity imports surge …
8th August 2013
Shale oil and gas has transformed the energy outlook in the US. However, the impact on the rest of the world has been negligible so far. Other countries are finding it difficult to replicate the technology and incentives used in the US. This means it may …
7th August 2013
We think that the proposed ban on exporting cobalt concentrates by the largest producing country, the Democratic Republic of Congo (DRC), will be deferred again at the end of this year. As a result, supply will continue to outstrip demand and cobalt …
The price of uranium is at a seven-year low but we forecast that it will increase from $36.50/lb today to $50 by the end of 2014, and to $60 in 2015. The key drivers are likely to be a recovery in Japanese demand and, in the long term, the construction of …
2nd August 2013
Supply factors played a key role in the movement of many commodity prices in July. Most importantly, the price of WTI has risen towards the price of the global benchmark, Brent crude, as logistical constraints eased. In contrast, rising production saw …
1st August 2013
Commodities are extending their generally poor performance into a third successive year. Concerns about the early withdrawal of monetary stimulus at least are overdone, even though there may still be another bout of nerves when the Fed does start to taper …
26th July 2013
Flash PMIs for China and the euro-zone, released this morning, have continued to diverge. China’s manufacturing index fell unexpectedly to its lowest level since last August, but the euro-zone equivalent hit a 24-month high. However, the prospect of …
24th July 2013
The analyst consensus is that the price of silver is likely to outperform that of gold as both continue to recover in the next year or so. We are nudging our gold price forecasts higher today in the light of the rebound so far this month. However, silver …
22nd July 2013
The recent swings in the price of natural gas in the US have mainly been caused by the unusually cold spring. The bigger picture is that higher demand from utilities and manufacturers and lower production due to high costs should continue to push the …
15th July 2013
We expect the price of US soybeans to decline gradually over the summer as exports from South America pick up. They may then fall more rapidly by the end of the year as a large supply of crops from the US harvest is likely to come onto the market. … …
12th July 2013
China’s commodity imports were stronger than overall trade in June, but were still weak in the first half of 2013 overall. What’s more, China is shifting to a lower and less commodity-intensive growth path over the next few years. … China’s commodity …
10th July 2013
Oil prices have been lifted again by hopes of stronger demand and fears of disruption in the Middle East, but we do not expect these supports to be sustained. Ample supply against a backdrop of still sluggish global activity should drag oil prices lower …
The falls in US grain prices over the last month were largely due to better weather which allowed farmers to finish planting. The extremely wet spring had supported prices due to fears that late plantings would harm yields. However, the additional …
8th July 2013
The collapse in the differential between the prices of Brent crude and West Texas Intermediate (WTI) primarily reflects the prospect of a further easing of the logistical constraints that have been holding back the traditional US benchmark. This spread …
4th July 2013
The relative resilience of oil prices in the face of worries about US monetary policy and the health of China’s economy suggest that $100 will act as a floor for the price of a barrel of Brent for a while longer, especially given the additional support …
3rd July 2013
Commodity prices mostly fell further in June, with gold being hit particularly hard by (premature) fears of an early end to the support from global monetary policy. Industrial commodities were also undermined by the deteriorating outlook for Chinese …
1st July 2013
The recent slump in the price of gold to less than $1,200 per ounce – which regrettably we failed to predict – has prompted us to take a more cautious view of the prospects for the precious metal. Indeed, there is little on the immediate horizon to …
28th June 2013
US President Obama’s speech on climate change policy yesterday contained little new. Nonetheless, it highlights the downward pressures on coal prices already coming from environmental policy, increased competition from natural gas, a weak global recovery …
26th June 2013
