Metals Spearhead Commodities Surge
The commodities sector is witnessing a surge, with metals taking the lead. Gold, silver, and copper prices have seen significant re-evaluations, outperforming expectations despite the typically negative impact of a strong US dollar and rising interest rates.
Citi Strategists’ Forecast
According to Citi strategists, this rally has room for further growth, with a potential 5-10% increase in the short term and 15-20% in the medium term. They anticipate a minor pullback before a surge in the second half of 2024, with gold reaching $2,500/oz and silver $30-32/oz.
Market Sentiment and Technical Analysis
The rally is supported by strong market cap share and index weights, indicating a broad boost to commodities sentiment. Additionally, technical analysis shows robust liquidity and growing investor interest in gold, with steady rises in trading volumes. Copper is expected to follow a similar but slightly less bullish technical path.
Conclusion
The current metals rally is defying expectations, driven by a combination of economic reflation, soft landing prospects, and strong investor interest. Citi strategists predict further gains, making metals an attractive investment in the current market environment.
