“Despite the recent strength, the overall weakness in precious-metals prices is likely to persist,” World Bank economists John Baffes and Damir Cosic said in a report. “Most risks are on the downside as economic conditions improve and the U.S. Federal Reserve eventually increases interest rates.”
Furthermore, Goldman Sachs Group also lowered its commodities outlook, pointing to an end to the current cycle, reports Glenys Sim for Bloomberg. Chief Currency Strategist Robin Brooks believes there will be substantial declines in some metals, energy and bulk commodities.
“A prolonged period of elevated commodity prices has catalysed a supply response,” the analysts said in a report. “We do not expect a collapse in global commodity prices. But we do anticipate substantial declines.”
For more information on the commodities market, visit our commodity ETFs category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of GLD.