Industrial metals rallied strongly in August on the back of encouraging economic data out of China and some depreciation of the US dollar. By contrast, the price of gold eased back, after hitting an all-time high early in the month. However, the gold price could push higher again in the coming months as we expect more downward pressure on US real yields. We also forecast further gains for industrial metals prices premised on our above-consensus outlook for China’s economy and the metals-intensive nature of the Chinese government’s policy stimulus. What’s more, we suspect that prices will remain supported in 2021 as the impact of China’s stimulus continues to be felt and the broader global economy gradually recovers. That said, we think that the big boost to prices is probably behind us now.
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