BASELINE VIEW – PRECIOUS METALS:

Precious metal prices continue to be driven by the markets expectations for the global interest rate path. While precious metals are seen as a hedge against inflation, higher rates to tame price pressures generally weigh on the non-yielding asset’s appeal. Therefore, should major central banks maintain their hawkish stance the appeal of precious metals may be dulled. 

BASELINE VIEW – INDUSTRIAL METALS:

Elevated interest rate have continued to weigh on base metals, however rate cuts and stimulus hopes in China, the worlds top metal consumer, as well as data showing strong growth in the Chinese renewable energy and automobile sectors have provided some cushioning for prices.