Julius Baer: Comentarios Materias Primas

Redacción - Jueves, 11 de Enero

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Gold: New year, old drivers Around the turn of the year, gold had a remarkable run. Futures prices went up for 12 consecutive days, the longest winning streak since the 1970s, pushing them above USD 1,320 per ounce. Yet this streak was mainly mirroring the weakening dollar, which declined on nine of the twelve days gold went up. Adding to that, sentiment in the futures market brightened up. Long positions held by speculative traders rose sharply while short positions remained close to multi-year lows. At the same time, there was only muted demand from investors. Holdings of physically backed gold products, our preferred indicator of investment demand, were broadly unchanged. Gold’s inverse relationship with the dollar was the strongest in over a decade last year and seems to be holding in the early days of this year. As the dollar started to recover more recently, gold gave away some of its gains. While the greenback is unlikely to return to its peak, we still see upside from current levels as accelerating growth should be accompanied by rising interest rates in the United States. This should weigh on gold over the coming months, justifying an unchanged cautious view. These short-term rate cycle headwinds should however fade as the year progresses. With the dollar expected to eventually roll over and upside pressure to bond yields easing, medium- to longer-term bottom-fishing opportunities should open up. Sustainable upside to gold should materialise once growth concerns creep into financial markets and revive western world investors’ demand for gold as a safe haven.

Gold’s recent winning streak was the mirror image of a weakening US dollar. We still see upside for the US dollar, resulting from accelerating growth and rising interest rates in the United States, which should weigh on gold over the coming months. These rate cycle headwinds should however fade as the year progresses, opening up medium- to longer-term bottom-fishing opportunities.

 

Carsten Menke, Commodities Research Analyst, Julius Baer

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Battery metals: The hottest commodities around

 

It feels as if the consumer electronics show in Las Vegas has become the most important gathering of the auto business, which only mirrors how much focus there is on electric cars and autonomous driving these days. The combination of new model launches, consumer demand and the governmental push for cleaner mobility, make it likely that electric cars will continue to increase market share from today’s levels, which are below 2% in the western world including China. We see this market share rising towards 10% to 15% by 2025. Mobili-ty is the next energy revolution in the making following shale gas and clean energy. The impact could be highly disruptive and bear consequences across various industries. Electric mobility grinds the entry barriers to auto manufacturing, auto suppliers see rising competi-tion from tech suppliers, and miners have an opportunity to deliver the metals needed in batteries. In particular, lithium, cobalt and to a lesser extent nickel use should grow with battery demand. These battery metals have become hot commodities last year with prices rising sharply, reflecting strong electric car growth assumptions. The mania, however, needs some cooling. Lithium and cobalt prices look toppish and are likely to follow the well-known commodity cycle. Today’s investments spree, low entry barriers and for mining standards short project lead times, suggest that they will soon be sufficient to meet longer-term, 2020 and slightly beyond, demand. The battery metal mining boom is set to cool before the end of the decade. Moreover, investors should be aware that there are only a handful of miners being chased by lots of hot money. Glencore (Hold, GBp 405.35/370.0) is among the lead-ing cobalt suppliers but this exposure is only one element of the overall investment thesis. We still believe that tech suppliers such as Infineon Technologies (Buy, EUR24.57/25.0) or Aptiv (Buy) provide a more attractive risk-reward than battery metal miners and battery manufacturers.

 

Battery metals such as lithium and cobalt are the hottest commodities, lifted by the rapid advances and high-flying expectations on electric cars. The mania needs some cooling and we believe that today’s investments will pressure prices towards the end of the decade. Tech suppliers rather than battery metals are the more attractive way to invest into the future of mobility.

 

Norbert Rücker, Head Macro & Commodity Research, Julius Baer

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