Brexit panic to give way to commodity revival, Citi report suggests – by Ian McGugan (Globe and Mail – July 12, 2016)

Commodities from oil to sugar to copper are poised for big gains in 2017, according to analysts at Citigroup Inc. They suggest that investors’ anxiety over Brexit will dissipate quickly, giving way to renewed interest in raw materials.

Since the commodity super-cycle peaked in 2011, prices for metals, energy and agricultural goods have frequently risen from January to June, only to slump during the second half of the year. This year will break that discouraging pattern, the analysts assert.

“Citi expects the strong performance of commodities to resume this quarter and through the end of the year,” Edward Morse and his team wrote in a report published on Monday. The gains will only pick up speed after that, they said. “Citi is especially bullish [on] commodities for 2017.”

Prices for oil are likely to shoot up 27 per cent in 2017, while natural gas prices will rocket ahead by 39 per cent, the analysts predict. Copper and zinc will advance by 10 per cent, while sugar climbs 22 per cent.

To be sure, there will be some losers. Gold and silver prices are likely to retreat – although only slightly – from their recent gains, while iron ore producers will continue to struggle with too much supply.

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