Scotiabank has released a report for Scotiabank Commodity Price Index by Rory Johnston, Scotiabank Economics’s Commodity Economist, on August 30, 2019. The summary of the report is as following.
Economics of Pessimism Batter Industrial Commodities, Gold Boosted by Market Misfortune
The global economic outlook continues to deteriorate and industrial commodity prices are feeling the weight of bearish macro sentiment.
We are reversing our prior optimism and now expect the US-China trade war to steadily worsen straight through to the 2020 US presidential election, with neither Washington nor Beijing showing any willingness to deescalate tensions.
Commensurate with this bearish slide in our outlook, risks are now to the downside of our current industrial commodity price forecasts and to the upside of our precious metals forecasts, which will be updated in October when firmer data is available.
Canadian oil markets received a rare spot of good pipeline news in August with the Nebraska Supreme Court ruling in favour of Keystone XL and the company behind the Trans Mountain Expansion Project revving up hiring for potential construction as soon as September.
While uncertainty is weighing on industrial commodities, precious metals have ripped higher on the back of plunging bond yields and safe haven bids, with gold reaching its highest level since the end of the eurozone crisis at nearly $1,550 per ounce.
