UBS - Commodities Rally Will Continue Into 2025: UBS Report
2024-05-29 09:13:24 ET
Analysts at Swiss bank %UBSGroup (NYSE: ) are forecasting that the current rally in commodities such as %Gold , %Oil and %Copper will continue into 2025.
Specifically, the analysts say that catalysts such as strong global demand, geopolitical turmoil, and U.S. interest rate cuts could drive commodity prices 10% higher over the next 12 months.
“We see higher commodity prices ahead and expect total returns of around 10% for broad commodity indexes over the next six to 12 months,” wrote the UBS analysts in a new report.
The bank’s own commodity-based UBS CMCI Composite Index has risen 11% so far in 2024 as prices for items ranging from gold and crude oil to copper and palladium increase.
UBS added that crude oil remains its preferred commodity for the remainder of 2024 and into 2025, with expectations that prices will move back above $85 U.S. per barrel.
However, UBS also expects gold prices to continue rallying as central banks continue buying the precious metal amid geopolitical uncertainties.
Gold is also likely to get a price boost from the U.S. Federal Reserve lowering interest rates later this year, said UBS.
The Zurich-based bank also encourages investors to buy any price dips in copper as supply challenges are likely to keep the industrial metal’s price elevated.
UBS says the fundamentals surrounding copper, notably limited supply, remain intact. As such, the bank expects copper prices to reach $12,000 U.S. per metric ton by mid-2025.
The stock of UBS has gained 59% over the last 12 months and currently trades at $30.87 U.S. per share.