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UBS forecast weaker gold prices for 2022

January 14, 2022

Geneva-Switzerland (Jan 14)  Dominic Schnider, UBS wealth management, head of commodities & APAC FX and macro gave an interview about this take on commodities and the global commodities index.  He said "demand has been robust in the developed world, that's the main story"

He continued by saying "global growth will be above trend in the 1st Q this year. The supply side (in commodities) is still challenged" and we "could see a 10% increase in the broader commodities indices this year". Elsewhere "A driver in commodities sector could be that in world is yield starved". On Base metals, he noted that they are under-supplied and copper could head toward $11.500/lb. 

When speaking about nickel, despite the Indonesian government tax hikes Schnider believes the supply side is getting stronger and this could curtail some of the momenta. 

However, the Swiss investment bank is still bearish on gold, "the dollar could be strong and this means gold could be weak" in 2022. There are a few nuances that Schnider picks up for the theme of the stronger dollar. Portfolio directions are still positive for the dollar and negative for the Euro. Elsewhere, the  Fed vs ECB trade still remains important as the ECB could stick to its ZIRP and QE policy for some time to come. He added he still expects EUR/USD to head to 1.10.


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