The ongoing recovery in economic activity – from lows earlier this year – will support the prices of most commodities in the second half of 2020 and into 2021. We are particularly positive on the outlook for industrial metals given that much of China’s planned policy stimulus will take the form of infrastructure spending. In contrast, we are somewhat more cautious on the outlook for oil demand given that measures to curb the virus could prompt a more permanent reduction in commuting and business travel. Meanwhile, the price of gold should remain elevated for some time yet given that real yields are likely to remain low.
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