Signs of a recovery in industrial commodity demand were emerging at the beginning of 2020. Indeed, the economic data have improved and investor concern surrounding the US-China trade war has eased. But the recent coronavirus outbreak in China quickly put paid to any renewed sense of optimism. For now, our central case is that the price moves since the outbreak will be reversed as the virus is brought under control, and that base metals will outperform later this year as gold prices fall back. But if China’s economy remains locked down for many months, prices could yet fall further.
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