In the not to distant future I will write about the reversals of some historical correlated assets: Gold vs. the US Dollar vs. the Canadian Dollar, etc. All are performing in non-traditional ways and I'll explore why this is the case. But for today, lets see what some of the guru's are saying about PGMs:
BMO forecasts gold, silver, and PGMs to do ‘very well' next few years
BMO Capital Markets Global Commodity Strategist Bark Melek, forecasts gold and other precious metals are "projected to do very well over the next several years."
"The key drivers for the precious metals group are the U.S. dollar, the competitive currency devaluation concerns, an eventual move toward a higher inflation environment, and improvements in jewelry and industrial demand as the world pulls out of recession," Melek suggested. "The end to producer de-hedging, central bank net buying after a very long pause, and concerns that excessive U.S. and European government debt may lead to future monetization are additional key drivers for the outlook."
He also suggested there will be "considerable upward price pressure well into 2011 due to lackluster mine site production, sharply higher power costs in South Africa and a relatively high currency in producing countries."
In his analysis, Melek noted that copper has jumped 165% from its low during the bad days of late 2008 and early 2009. Lead and nickel are up 150%, zinc has jumped 125% while iron ore is up 120%. Gold has jumped about 65%, platinum 100%, silver 105% and palladium just over 190%.
George Soros Bets on Gold - Soros Fund Increases Stake in Gold ETF
Legendary hedge fund manager George Soros is double downing his bet on gold, even though he considers the market to be a bubble.
Back in late January, at the World Economic Forum, Soros called gold "the ultimate asset bubble."
He failed to mention, however, that his hedge fund had recently more than doubled its position in the yellow metal.
“We remain positive on gold’s medium- to longer-term outlook. The fundamental
factors that have underpinned the nine-year bull market for gold remain fully intact
in our view, including:
• central banks are likely to continue to be net buyers of gold as emerging
economies look to diversify their reserve holdings,
• investment demand for gold (at the institutional and retail level) should remain
strong as individuals look to diversify their positions,
• questions remain about the long term viability of the U.S. dollar as the world’s
reserve currency,
• continued improvement in the U.S. economic situation could lead to
accelerated inflation fears,
• gold mine supply remains challenged over the longer term, and:
• a recovering economy is likely to lead to increased demand for labour and
materials further challenging the cost base to produce an ounce of gold”
INDUSTRIAL COMMODITIES TO PERFORM VERY WELL
BMO Research expects industrial commodities "to perform very well into 2011, with most prices above the 2009 levels.
Copper, iron ore and met coal are BMO's top industrial commodity picks, based on strong demand in China coming from fixed asset and export growth. Melek suggested demand for copper and other metals and bulks (iron ore, metallurgical coal) will move higher) "due to increased global industrial (U.S., Europe and Japan) production activity and firm capital spending."
The future's hot for lithium - and getting hotter
Lithium is not just a flavor of the year. It is in high demand for hybrid and electric vehicles, laptops, cell phones and will remain even more so as technology is perfected and consumer demand increases globally.
Saverio Manzo
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