JPMorgan: Bullish on Gold and Copper, Bearish on Energy, Post-Crash Market Has Split into Two Worlds
J.P. Morgan's Global Market Strategy views the recent sharp sell-off in commodities as a healthy correction rather than a trend reversal, presenting a buying opportunity for metals while expecting further declines in energy. The divergence is driven by differing supply dynamics, despite supportive global demand from recovering manufacturing PMIs and expansionary fiscal policies.
The firm remains structurally bullish on gold, viewing the pullback as healthy amid continued central bank buying (forecast at 800 tons this year) and investor diversification. It sees gold reaching $6,300/oz by year-end. While more cautious on silver due to its volatility, it expects support around $75-80/oz. Copper is also seen as a buy on dips, with potential for prices to exceed $15,000/t later this year due to anticipated supply tightness and strong demand.
In contrast, the energy complex is expected to weaken. Oil prices are seen carrying a $7/barrel geopolitical premium from Iran tensions, which should fade. The report predicts global supply growth will outpace demand by threefold. Natural gas prices, which spiked on cold weather and low inventories, are already retreating as forecasts normalize.
marsbit02/09 05:23
