Gold prices are expected to maintain their positive momentum in the near term due to the US Federal Reserve’s stance and negative interest rate policy adopted by jurisdictions such as Japan, Europe and Switzerland. US-China trade negotiations, global growth in 2020 and geopolitical issues are all likely to create volatility in gold prices.4
Copper prices on the other hand are expected to experience an uptick in the medium term underpinned by limited production capacity and increasing demand from electric vehicles and green energy projects.5
Nickel prices are likely to maintain elevated levels as the current supply deficit is expected to continue in 2020. However, the deficit is expected to decline from current levels over the medium to long term.6
Zinc prices may face downward pressure as a result of expected surplus in the near term. International Lead and Zinc Study Group expects a surplus of 192,000 tonnes in 2020, as compared with a deficit of 178,000 tonnes in 2019, on the back of higher production from Chinese smelters.7
While the outlook for base metal prices at the start of 2020 was favourable, the coronavirus is creating uncertainty, which we expect will impact the expectations discussed above as the year unfolds.