Do Not Expect a Commodity Rally Any Time Soon

Morningstar's Head of Investment Strategy Andy Brunner says there is little to suggest a fundamentally driven sustainable rally in any of the main commodities

Andy Brunner 19 October, 2015 | 9:30AM

While sharp bounces from oversold conditions should be expected, there is little to suggest a fundamentally driven sustainable rally in any of the main commodities. Supply needs to be reduced in metals via production cuts while the whole Saudi Arabian venture of a surge in low cost production was aimed at reducing US higher cost oil production.

Nothing daunts or deters the gold bugs, with “peak gold” the latest narrative

So far it has managed to slightly lower US production but also substantially reduce US production costs and drastically lower breakeven levels. Oversupply remains.

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About Author

Andy Brunner

Andy Brunner  is Head of Investment Strategy, Morningstar UK

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