Global Commodities Strategy
The Q313 rally in industrial metal prices has limited room to run and we think the time to re-enter a bearish industrial metals view in our strategy table is approaching . This is underpinned by our conviction that China is in the throes of a multi-year, structural economic slowdown.
With US military action against Syrian targets likely, we continue to highlight upside risks for oil prices. That said, a move by Brent up as far as the Arab Spring highs of US$128-130/bbl is unlikely as we do not foresee any material supply disruption.
Gold prices should find stiff resistance around US$1,500/oz and w e expect a move down towards US$1,100-1,200/oz in the coming quarters. Silver looks vulnerable to an even more severe decline.
|Diminishing Returns Of Stimulus|
|S&P GS Industrial Metals Index (Weekly) & China Economic Stimulus|