Commodities: The year Ahead
Masterforex-V | Apr 25, 2014 08:13AM ET
The situation changes on commodity markets -- investment banks go out of business. Banks that have been dominating on the market for the last ten years, sell their units on the commodities trade. The customer interest in this sector has decreased - thee commodities super cycle came to the end. But interest of the regulators has grown.
The analysts of Masterforex-V World Academy found out what awaits the world’s commodity markets.h2 Traders: The situation on the commodity markets./h2 h3 Gold/h3
The global economy improvements affected the gold market too. The precious metal began to lose appeal as a means of assets preserving. There appeared the pessimistic mood among theanalysts concerning the prospects of gold.
Although, gold is still receiving some support. It is expected that the trade policy of blocking imports of gold by India would be somewhat weakened. You can also expect a stabilization and reduction in the outflow of gold from ETF and even gold inflow in the second half of 2014. Gold production growth slowing in 2014 and 2015, will also give some support for the precious metalprices. In addition, Central Banks will act as gold buyers in 2014-2015. All these factors suggest that prices would stabilize and even increase slightly.
Nevertheless, before the New Year a number of European Banks have revised their forecasts for gold for 2014 downwards. For example, UBS lowered its forecast for the average price of gold in 2014 to 1,200 U.S. Dollars from $ 1,325 per Ounce, while Societe Generale Landmark– to $1,050 per Ounce at the end of 2014. In Ukraine, respectively, the fall of gold prices can be expected under the mark 300 Hryvnia per gram.
As for precious metals, such as Aluminum, Copper, Nickel and Zinc, the prices will gradually rise, but will not be able to surpass the highs of 2013. Thus, according to Moody's, in 2014 the copper will trade in average at $ 3 per pound, aluminum -- 0.8 U.S. Dollars per pound. World’s demand for industrial metals will grow slowly and with uneven pace. The main driver of the growth is the industrial production. The growth in demand is expected from the U.S. and Latin America; the demand in Europe remains weak,the demand in Asia will grow by about 4-6%.
h3 Crude Oil/h3The oil market is also preparing to survive the recession. Despite the positive report of the IEA on the global demand for oil, the forecasts for 2014 are rather pessimistic. Demand, of course, will continue to grow as the economic crisis is still receding. But the offer will not lack behind, especially in countries, which are not the OPEC members. In addition, the sanctions against Iran can be eased and the problemsin Libya will be resolved in 2014. This, in turn, will increase the oil supply to the world market. According to analysts of HY Markets, it is expected, in general, the price decrease to 80 Dollars per barrel.
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“Recently, Brent Crude Oil WTI May 2014 (CLK14) was trading in the strategic Flat - at 102.54 U.S. Dollars" –- said the analysts of HY Markets:
But the situation on the stock markets is not so unambiguous. From a formal point of view, the markets will grow as the economy strengthens and the companies, in theory, will be developing. However, as the reporting season passes now, the market does not always respond to the figures as written in the textbooks. So, it makes sense to consider another scenario.
It is not a secret that Stock Markets grew by the stimulus programs infusion in 2013. These programs are now slowly starting to collapse -- ones earlier, some later, and someone just thinks that this process is irreversible. In other words, the removal of massive infusions to the markets could lead to their downfall. So, there is a chance that the year would end below the weaving levels despite the official forecasts.
And because people are buying actively the shares during 2013, there appeareda niche on thebond market that needs to be filled. Thus, we should expect bond purchases increasing. Interestingly, the purchase of European bonds now looks more attractive than of the American ones.
According to the average forecast,the average yield of the ten-year U.S. Treasury bonds will increase next year by more than 0.5 percentage -- to 3.38 % , and therefore , the loss of the holders of these securities will be 1.6%. At the same time,the investments in Spanish and Italian bonds will be able to bring incometo the investors.
About food. More precisely, we’ll talk about the prices of food. In 2013, world food prices have stabilized at the sufficiently high levels. According to the Food and Agriculture Organization / FAO / UN, due to the fact that last year was obtained great harvest of cereals, sugar prices and almost all kinds of grains, except rice, went for a fall. Vegetable oil went cheaper too. The prices for dairy and meat products reached a new peak, as there is an increasing demand for protein products in the world.
HY Markets analysts believe that in 2014 the trend of high prices at the same high yields is expected to continue. This should happen due to the increased demand from Asia and the East and also due to the population growth and increased demand from developed countries because of the economic recovery.
The analysts of Masterforex-V World Academy will monitor the changes on the commodities market. You will be aware of the price movement for goods and also of such changes reasons.
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