There may be more pots of gold at the end of this market’s rainbow.
The commodity frenzy took a breather this week as cooling demand from China and hawkish commentary from the Fed prompted investors to take advantage of the recent price surge.
But despite the recent declines, Wall Street professionals remain focused on the long-term commodity story. They tell Yahoo Finance that fundamentals are still strong and are confident the record rally will resume.
“There is reason to believe the ‘great reflation trade’ has more room to run,” Jonathan Krinsky, BTIG’s chief market technician, told Yahoo Finance.
Krinsky points to silver’s recent outperformance versus gold as an indication of a “strong, healthy bull market for precious metals.” He remains bullish and thinks gold has yet to reach its final high. “There is nothing on the gold price chart that indicates a definitive top is approaching.”
So far this year, gold futures are up 12%, compared to silver’s 27% gain.
And copper, which has outperformed both silver and gold in 2024, rose above $11,000 a tonne for the first time this week. The metal has caught fire with investors amid bets that it will play a crucial role in the transition to renewables and electric vehicles, along with the construction of data centers driven by AI.
“What you really have is a commodity supercycle that started four years ago… and you probably have another six to 10 years to go with very strong performance,” said John LaForge, head of real asset strategy at Wells Fargo.
That bullish sentiment appears to be gaining momentum on Wall Street.
Michael Widmer, head of metals research at Bank of America, told Yahoo Finance that copper looks “very strong” on a fundamental basis and that investors should use any consolidation as a buying opportunity.
“I think the structural bull case for the copper market is still there,” Widmer said. “This is clearly a buy-the-dip market.”
Widmer and his team see copper prices rising more than 25% from current levels in 2025, reaching an average of $12,000 per tonne.
For investors looking to jump in and capitalize on the bullish calls on metals, Bank of America has named Antofagasta (ANTO.L), Freeport-McMoRan (FCX) and Teck Resources (TECK) as among the top buyer picks, alongside Franco Nevada (FNV). and Wheaton Precious (WPM) as recommended ways to play gold.
Economic growth in the US also continues to support demand for raw materials. Deutsche Bank Chief U.S. Economist Matthew Luzzetti shares his economic outlook in the latest episode of the Opening Bid podcast. Listen in below.
Seana Smith is an anchor at Yahoo Finance. Follow Smit on Twitter @SeanaNSsmith. Tips about deals, mergers, activist situations or something else? Email seanasmith@yahooinc.com.
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