BASELINE VIEW – PRECIOUS METALS:
As the global tightening cycle is expected to come to an end in the coming months and thus end, the pressure exerted on the likes of gold, which has no yield, should start to dissipate. Equally, the global macro backdrop is uncertain and should prompt investors to seek safe haven alternatives, boosting bullion. Platinum prices are underpinned by demand shortage fears which are unlikely to dissipate in the near term as it is related to the extraction of the metal in South Africa, which is facing increasing electricity supply challenges.
BASELINE VIEW – INDUSTRIAL METALS:
China’s April industrial output and retail sales growth fell short of expectations, indicating a loss of momentum in the economy at the start of the second quarter. The data raises concerns about the country’s post-COVID recovery. Given that China is the predominant consumer of base metals, a slowdown here will be factored into the demand side of the equation.
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