- Write by:
-
Tuesday, January 22, 2019 - 9:58:24 AM
-
867 Visit
-
Print
Mining News Pro - The negative effects of trade disputes on global growth this year will push down demand for base metals and steel-making commodities, while the economic uncertainty will drive gold prices higher, CIBC says.
According to Mining News Pro - “CIBC economists are not forecasting a recession in 2019, but we expect increasing trade barriers and tariffs to slow down global growth over the next 18 months, delaying our previously forecast 2020 recovery to 2021,” the bank’s institutional equity research department writes in a research note.
Consequently, the bank’s analysts have trimmed their copper price forecasts for 2019 to US$2.75 per lb. (down 10.6%), and to US$2.85 per lb. (down 12.3%) in 2020. CIBC forecasts zinc prices of US$1.29 per lb. this year (down 9.6%), and US$1.35 per lb. in 2020 (down 3.9%).
“We acknowledge that a stronger-than-expected fiscal and monetary policy response from China, and/or supply disruptions (i.e., Chuquicamata in copper, Chinese smelting constraints in zinc), may support higher price estimates,” it wrote. “However, a demand slowdown is likely to trump higher sustainable prices.”
“The stage appears set in favor of precious metals for the year ahead, with trade war uncertainty weighing on global growth, lowered rate hike expectations, Brexit uncertainty, and constructive demand-supply fundamentals for gold and gold equities”
CIBC is raising its forecast for gold to US$1,350 per oz. in 2019 from its earlier forecast of US$1,300 per oz., and US$1,400 per oz. in 2020. It expects silver to average US$17.00 per oz. this year and US$17.50 per oz. next year.
The bank also anticipates a gold deficit this year “on the back of stronger demand for the commodity over the next two years, primarily from bar hoarding, net Central bank buying, and Exchange Traded Products, whereas supply is expected to remain relatively flat year-over-year.”
Over the last 24 months, the gold industry has been “forced to refocus on shareholder returns leading to improved balance sheets, asset rationalization, and improvements in return on invested capital,” the bank’s analysts write. “This fiscal discipline has also pushed out development pipelines and further reduced expected mine production over the next decade, thereby reducing the expected excess supply profile over the next several years.”
“Although large-scale M&A has kicked off once again, history has shown that it takes time for the industry to rationalize production pipelines.”
Short Link:
https://www.miningnews.ir/En/News/328799
The four largest indigenous communities in Chile’s Atacama salt flat suspended dialogue with state-run copper giant ...
A prefeasibility study for Predictive Discovery’s (ASX: PDI) Bankan gold project in Guinea gives it a net present value ...
Representatives from the Peñas Negras Indigenous community, in northwestern Argentina, clashed with heavily armed police ...
Newmont confirmed on Wednesday that two members of its workforce died this week at the Cerro Negro mine located in the ...
Chinese investors are snapping up stocks tied to high-flying metals from copper to gold, aiding an onshore market facing ...
Outflows from global physically backed gold exchange traded funds (ETFs) continued for a 10th month in March, but at a ...
i-80 Gold fell by over 11% at market open Tuesday following its announcement of a C$100 million ($74m) public offering ...
Australia’s Westgold Resources said on Monday it had agreed to acquire Toronto-listed Karora Resources in a ...
Chinese coal prices are likely to keep falling until the start of the peak summer season, suppressing imports of the ...
No comments have been posted yet ...