Settling in for some near-term weakness

December was a relatively strong month for both precious and industrial metals, with prices rising almost across the board. A weaker US dollar and safe-haven buying buoyed gold prices, while base metals prices benefitted from signs that industrial activity may be turning a corner. We forecast a rise in base metal prices and a fall in gold prices by end-2020, as global growth slowly revives. However, near-term headwinds remain. As a result, we think that last year’s theme of elevated gold prices and moribund base metals will linger in the first few months of this year.