Key Commodity Forecast in Q3 2024
Is Oil Consumption Falling?
As the global economy deals with ongoing challenges, special attention should be given to key commodities as we enter the third quarter (Q3) of 2024. Precious metals like gold and silver have seen gains this year, and many analysts believe this trend may continue.
Gold Price Forecast
Nikos Tzabouras, a Senior Financial Editorial Writer, says that with “two active military theatres, key elections ahead, and uncertain global monetary policy, more people may turn to Gold as a safe haven.” He added, “Central banks from emerging economies like China are buying more gold, which could push prices to new records.” But he warns that the Fed’s reluctance to cut rates supports the U.S. dollar, making it stronger and possibly reducing the rise of gold prices.
Is Oil Consumption Falling?
According to Tzabouras, oil consumption is expected to drop significantly this year due to the push for net zero emissions and the rising popularity of electric vehicles (EVs). He also notes that oil supply is increasing from non-OPEC countries such as the U.S., which is about to hit new records. Although this impacted prices in Q2, Tzabouras believes a rebound is likely in Q3. "OPEC+ could extend their supply cuts, tightening the market over the coming months," he says. He also mentions that fossil fuels are still important and the transition to clean energy is facing challenges. Despite this, reaching $100 per barrel seems difficult and could hurt demand.
Copper Supply Expectations
Copper reached record highs this year but pulled back later. Tzabouras predicts that supply and demand factors will push prices up again. "Consumption will continue to grow," particularly because copper is essential in the artificial intelligence revolution and the clean energy transition. However, supply has dropped as major miners cut their production targets. Risks include China’s troubled property market and the slowdown in EV adoption.
Natural Gas Price Forecast
Demand for natural gas is expected to grow significantly, mainly due to industrial consumption from Asia. On the supply side, major producers have reduced their output targets, making the situation less clear. "Natural gas prices surged in the second quarter, and improved fundamentals could drive prices higher," Tzabouras explains. Natural gas benefits as a bridge energy source in the transition away from fossil fuels. However, challenges such as Europe's reduced usage and the unusually warm weather exist. He highlights risks from China’s uneven recovery and potential uncertainties in India’s growth.
Should Investors Focus on Commodities?
Nikos Tzabouras' analysis shows a complicated scene for the commodities market in Q3. While some commodities such as copper and natural gas look ready for growth due to limited supply and increasing demand, others face challenges. Oil, for example, is torn between a potential rebound from production cuts and slowing demand because of the green energy transition.
By understanding these trends, housewives and everyday investors can make better decisions about where to invest their money.
