JOHANNESBURG (miningweekly.com) – Increased economic uncertainty and declining metal stocks are expected to drive gold and copper prices this year, Fitch Solutions commodities analyst Sabrin Chowdhury stated during a webcast on Wednesday.

She noted that the expected rebound in gold was “already playing out” and that the price should reach 2013 highs, averaging around $1,300/oz this year, with investment flows into safe haven assets increasing as dollar strength, market volatility and the trend toward protectionism continues.

Further, tensions between the US and China will force the latter to modify its metals production and consumption; however, Chowdhury did not expect the trade dispute to significantly dent the positive outlook on Chinese metal demand.

Nonetheless, she cautioned that a protracted conflict with the US would prove ever more challenging and concerning in terms of economic sentiment and price fluctuations.

Chowdhury added that, while precious and nonferrous metals were “poised for some upside,” the outlook for ferrous metals – particularly ferrochrome and manganese –  was neutral, while liquefied natural gas and coal prices were expected to dip.

INVESTMENT 

Investment would remain subdued owing to mining majors continuing to refrain from large capital expenditure (capex) projects, noted Fitch Solutions commodities analyst Diego Oliva Velez.

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