The nine-week, gold-led rally in the precious metals faltered this week. We had warned that gold was looking a bit expensive, and that prices were vulnerable to a slight correction. While real bond yields edged up in recent days, we still think that they will resume their decline before long, which should allow precious metals prices to start pushing higher again. Despite a modestly bullish US stocks report on Wednesday, oil prices barely moved on the week. Instead, it was agricultural commodities that saw the largest price rises, with lumber performing particularly strongly amid a surge in homebuilding and DIY-related demand in the US. That said, a recovery in supply should prevent further price gains in the coming months.
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