Bank of America says the copper supply crisis is here
By Steve Goldstein for MarketWatch
Analysts also say gold can reach $3,000 an ounce
Trading Economics
"Copper futures surged to above $4.25 per pound in April, the highest in 14 months, as data showing an upswing in global manufacturing activity supported expectations of strong demand for base metals. Industrial production in Germany rose more than expected in February, spurring optimism over European manufacturing output and adding to momentum-bidding for major commodity funds. The developments were aligned with a rebound in US manufacturing according to ISM data and upside surprises for both the Caixin and official Chinese manufacturing PMIs, challenging concerns about a slump in the sector for the two major copper consumers. On the supply side, disruptions in major African mines magnified previous setbacks in key mines in Panama and South America, driving Anglo American to downgrade its copper production guidance by over 160,000 tonnes. The pessimistic outlook for ore production drove Chinese smelters to move closer to a 10% joint reduction in output to improve margins."
"Gold climbed past $2,350 an ounce on Tuesday, extending its bullish streak for the eighth session amid strong momentum trading and firm safe haven demand. Several central regulators in Asia and some Eastern European countries have stepped up their purchases of bullion this year, with the People's Bank of China increasing its gold reserves for the 17th consecutive month to a total of 72.75 million troy ounces in March. Bank of America has projected the metal to rally to as much as $3,000 an ounce by 2025. The rise in gold prices has been further bolstered by geopolitical tensions in Ukraine and the Middle East, as well as stubborn inflation. Despite concerns regarding the Federal Reserve's delay in interest rate cuts, investors have been focused on safeguarding against growing price pressures. Market attention will now turn to the upcoming release of FOMC minutes and US CPI data for more insight into the trajectory of interest rates."
MY TAKE: The historical oil to gold ratio is 20 to 1. So, $3,000 gold points to $150/bbl oil price.
MarketWatch: Copper and Gold going higher
MarketWatch: Copper and Gold going higher
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: MarketWatch: Copper and Gold going higher
Gold prices are going higher. We could see the price of gold heading towards $2545 and then $2710. That would equate to $127.25 and $135.50 using the historical gold to oil price ratio of 20:1.
The Dow could go as high as 42k for this year. The current Dow to Gold ratio sits at 16.10 and headed lower to 12.10. The Dow closed yesterday at 38461.51. The current Dow to Gold ratio sits at 16.10 suggests gold price should be at U$2388 and oil should be trading at U$119.4.
The Dow could go as high as 42k for this year. The current Dow to Gold ratio sits at 16.10 and headed lower to 12.10. The Dow closed yesterday at 38461.51. The current Dow to Gold ratio sits at 16.10 suggests gold price should be at U$2388 and oil should be trading at U$119.4.