Commodities have not been immune to the recent turmoil in financial markets, with the prices of most industrial metals, agricultural, and energy commodities extending their downward trends over the past week. This has seen prices of key commodities including oil and copper fall below our already below-consensus end-2024 forecasts. That said, we think that commodity prices have generally overshot on the downside and the stage is set for modest rebounds by end-year. The threat of conflict escalating in the Middle East is a key upside risk for oil and natural gas prices in particular. Gold prices are a notable exception in all of this, and their recent outperformance has all the hallmarks of safe-haven demand. While a lot of monetary easing is arguably priced into the market, strong “non-traditional” demand and geopolitical tensions could continue to push prices higher.
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