Commodities

Gold has dropped sharply over the past month, from c.$1,350/oz to c.$1,250/oz, with the majority of the move lower occurring on Tuesday of this week, following hawkish comments by Fed officials (Lacker in particular) and a subsequent break of the psychologically and technically important $1,300/oz level (N.B. the next important… Read More »

Silver is often looked at in gold’s shadow. The price performance of two metals is 80% correlated. We find that the best way to model silver prices is by looking at gold prices. Silver in gold’s shadowSilver’s price performance is 80% correlated with gold’s price performance. When investor sentiment toward… Read More »

Union Bancaire Privée – UBP is maintaining its prudent stance on gold and stand by its conviction that the yellow metal will probably remain range-bound for the months to come … … on the one hand it will continue to be seen as a safe haven and to benefit from… Read More »

Adding a precious metals allocation to a diversified stock-bond portfolio has historically increased portfolio efficiency – lowering risk while increasing return Precious metals such as gold, silver, platinum, and palladium have grown in prominence in recent years as viable investment alternatives to include in asset allocations. Despite being one of… Read More »

Precious metals equities have re-rated to historical peaks or above. Morgan Stanley lifts its bull cases to reflect this, but still the risk reward is unappealing bar continued commodity price rises. MS downgrades Randgold to UW, with Centamin most and Fresnillo least preferred. Equity valuation disconnects… The recent rally in precious… Read More »

Sugar, coffee and soybeans have made spectacular returns this year, but much of their gains have been driven by currency movements, particularly the Brazilian Real Brazilian Real drives rallyThe El Niño weather pattern led to a failed monsoon in India and unseasonably wet weather in South America in 2015/16.However at… Read More »

Stronger Q1 2016 earnings coupled with the rising price of gold helped improve sentiment towards gold miners, driving the rally so far. Gold miners tighten their belts too much too fastGold miners have skyrocketed since the start of the year, staging a 81.6% rally. That is the strongest 6-month rally… Read More »

China is both one of the largest producers and consumers of most commodities. Yet financial centres in the UK and US are responsible for setting global prices for many commodities. China and commodity demandChina’s role in the upward phase of the commodity supercycle remains largely undisputed: resource-intensive economic growth, led… Read More »

Single commodities are subject to specific and sometimes unique factors which drive price trends to be distinct and for volatility to be elevated. In this instalment, we take a closer look at some of the most important drivers responsible for the volatility seen in single commodities and how to mitigate with… Read More »

Uncertainty over the US Federal Reserve (Fed) policy, risks of the UK exiting the EU, a China slowdown and a lacklustre earnings season in developed markets have all contributed to greater volatility in asset classes. We continue to expect further weakness in the US dollar in the coming month, primarily… Read More »