Its been a quiet start to the week on the commodity markets with public holidays in the US and UK. In the US the national celebrated Memorial Day which is a federal holiday set aside to remember the people who died while serving the countrys armed forces. In the UK the nation celebrated Spring Bank Holiday (not to be confused with Summer Bank Holiday in August).
On the foreign exchange markets the Australian dollar has had a welcome fall this week on the back of strong US inflation data. The AUD/USD is currently trading at around 78.3 down from the 80 cent last week. Yesterday Westpac forecast the AUD to be down to 73 cents by year end.
Elsewhere Goldman Sachs have forecast a 16% decline in the price of Copper in the next 12 months on the back of weakening China demand growth and the slowdown of Chinese property construction
Please find the following article for your perusal;
**** Goldman Sticks to Commodity Bear Call as Copper Vulnerable **** by Aya Takada – May 25, 2015
Commodities will reverse a rally that started in March as a stronger U.S. dollar, cheaper oil and cooling China again pressure raw materials, especially copper, according to Goldman Sachs Group Inc.
Copper will lose at least 16 percent over the coming 12 months on Chinas weakening demand growth and slowdown in construction completions, analysts including Jeffrey Currie said in a report e-mailed Monday.
We see downside pressures on commodity prices re-emerging, the analysts wrote in the report dated May 22. The recent rise in commodity prices is clearly at odds with our lower-for-longer bearish view across the complex.
The Bloomberg Commodity Index of 23 raw materials has rebounded 5.7 percent since hitting a 12-year low in March. Copper in London and West Texas Intermediate crude both surged into bull markets after tumbling to their weakest points this year in January and March, respectively.
Copper is the most exposed to a stronger dollar and lower energy prices, as well as cooling demand growth from China, according to the report. The bank sees prices falling to $5,200 a metric ton in 12 months.