Bank of America BofA Securities commodity strategist Michael Widmer is raising price forecasts on a host of commodities,
“Having been bullish most mined commodities in 2020, we expect prices to rally further from here on 3 macro themes 1) stimulus, 2) reflation and 3) rebound of the global economy. Hence, we lift price forecasts especially for copper, which we see averaging $9,500/t ($4.31/lb) in 4Q21 [up 15 per cent from previous estimate, current price US$8009/t] , with the market likely flipping into a deficit, as inventories are low. Similarly, we are reinforcing our view that iron ore should stay higher for longer so prices are set to average $135/t this year, compared to our previous expectation of $100/t; that said, 2021 will likely be split into two halves, with a stronger 1H likely followed by a weaker end to the year. Meanwhile, as the economy rebounds and nominal rates have violently pushed higher, gold has struggled. These headwinds are unlikely to abate until 1) inflations moves higher or 2) the Fed ultimately signals a cap to rates. We still see the yellow metal rally back above $2,000/oz.”