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"Gold: The focus of the gold market has fully shifted away from Chinese investment demand and central bank buying to the outlook for interest rate cuts in the West. In the near-term, we remain constructive on Gold. Expectations of lower interest rates are propping up sentiment in the futures market and luring safe-haven seekers back into the physical market. However, history suggests that lower interest rates alone are not sufficient to push gold prices higher. A recessionary environment during the rate cuts is generally positive for Gold; however, rate cuts without a recession are generally not positive for Gold.

Oil: We are neutral on oil. Oil demand is expected to stagnate in the Western world and in China, while on the other hand, production is expanding, thanks to profitable operations. The petro-nations will likely eventually phase out their curtailments as competition for market shares heats up. Geopolitics-driven price spikes are usually short-lived, and in absence of an extreme flare-up in geopolitical conditions, the current downtrend in oil prices might just extend a bit more."

 

 

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