MARKET
WHY COPPER?
A Copper deficit is set to inundate global markets throughout 2023 — and one analyst predicts the shortfall could potentially extend throughout the rest of the decade.
A 5.4-million-ton (4.9-million-tonne) copper supply shortfall by 2027 may push prices up by 20% to $9,800 per ton from around $8,200 per ton this year, Bloomberg New Energy Finance, a unit of the newswire company, says in its Industrial Metals Outlook 2H 2023: Heading into the storm.
WHY GOLD?
GOLD AS A HEDGE AGAINST INFLATION
Gold is often hailed as a hedge against inflation – it is popular among investors because it can be used as a hedge against currency devaluation, inflation or deflation.
Gold tends to be resilient during stock market crashes as the two are negatively correlated: Stocks benefit from economic growth and stability, while gold benefits from economic distress and crisis.
Through economic uncertainty, interest rates pose risks but also unlock opportunities for gold. While demand for gold has rebounded, particularly in the jewelry and bar and coin markets, the recent gold price sell-off has been largely driven by the sharp increase in interest rates in global fixed-income markets relative to the record lows they reached last year.
GOLD'S SIGNIFICANCE
GOLD REMAINS A KEY STRATEGIC PORTFOLIO COMPONENT FOR SEVERAL REASONS :
- A rising rate environment does not always result in gold’s price underperformance.
- A significant increase in inflation or money supply may offset the negative effect of rising rates.
- Central banks may use alternative monetary policy tools to limit the negative effect of rising rates.
- The prolonged level of short-term interest rates is creating a structural shift in asset allocation strategies by reducing expected returns and increasing portfolio risk.
GOLD PRICES SPIKE AS REAL RATES FALL
Gold has tended to perform well during periods of heightened market volatility. For example, when investor fear jumped in March amid regional bank failures, investors turned to gold as a relative “safe haven.” Year-to-date, exchange-traded gold funds have seen $2.7 billion of inflows, with most occurring in April after March’s volatility.
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MARKET
WHY COPPER?
A Copper deficit is set to inundate global markets throughout 2023 — and one analyst predicts the shortfall could potentially extend throughout the rest of the decade.
A 5.4-million-ton (4.9-million-tonne) copper supply shortfall by 2027 may push prices up by 20% to $9,800 per ton from around $8,200 per ton this year, Bloomberg New Energy Finance, a unit of the newswire company, says in its Industrial Metals Outlook 2H 2023: Heading into the storm.
WHY GOLD?
GOLD AS A HEDGE AGAINST INFLATION
Gold is often hailed as a hedge against inflation – it is popular among investors because it can be used as a hedge against currency devaluation, inflation or deflation.
Gold tends to be resilient during stock market crashes as the two are negatively correlated: Stocks benefit from economic growth and stability, while gold benefits from economic distress and crisis.
Through economic uncertainty, interest rates pose risks but also unlock opportunities for gold. While demand for gold has rebounded, particularly in the jewelry and bar and coin markets, the recent gold price sell-off has been largely driven by the sharp increase in interest rates in global fixed-income markets relative to the record lows they reached last year.
GOLD'S SIGNIFICANCE
GOLD REMAINS A KEY STRATEGIC PORTFOLIO COMPONENT FOR SEVERAL REASONS :
- A rising rate environment does not always result in gold’s price underperformance.
- A significant increase in inflation or money supply may offset the negative effect of rising rates.
- Central banks may use alternative monetary policy tools to limit the negative effect of rising rates.
- The prolonged level of short-term interest rates is creating a structural shift in asset allocation strategies by reducing expected returns and increasing portfolio risk.
GOLD PRICES SPIKE AS REAL RATES FALL
Gold has tended to perform well during periods of heightened market volatility. For example, when investor fear jumped in March amid regional bank failures, investors turned to gold as a relative “safe haven.” Year-to-date, exchange-traded gold funds have seen $2.7 billion of inflows, with most occurring in April after March’s volatility.
GET UPDATES
Stay up-to-date with investor news and announcements