Commodities

Gold and silver roared higher on Friday night as investors sought refuge in the sanctuary of precious metals, bonds, etc. If our view towards bond yields proves correct, gold could advance to a new equilibrium level after rotating around the $US1,900 level for the last three years.

• We remain bullish towards gold, initially targeting a break of its 2023 high, still over +7% higher.

Copper again edged lower last week on further demand concerns as China continues with its targeted stimulus instead of a sledgehammer approach. Plus, the conflict in the Middle East dampens optimism towards a soft landing for the Western economies, i.e. a high oil price is inflationary and determinantal to economic growth.

• We remain bullish toward copper, but an initial break under $US3.50 feels like an increasingly likely outcome.