Gold, Commodity and Mining Stocks Outlook

With few exceptions, equity analysts still see mined commodity and miner share prices as overvalued, propped up by the sustained Chinese stimulus

Morningstar Equity Analysts 3 April, 2018 | 2:50PM

gold bars coins currency commodities precious metal natural resources mining miner stocks

Trump’s imposition of steel and aluminum tariffs made waves early in 2018, leading shares in steel and aluminum producers higher. As we anticipated, these tariffs were structured to contain exemptions for both Canada and Mexico immediately, with likely carve-outs for additional trade partners later.

Although we’ve increased our near-term steel price expectations in the United States, we remain bearish over the long run. Substantial global production overcapacity leads us to expect most metals companies to fall short of earning their cost of capital over the decade to come. This leads us to view steel and aluminum producers as considerably overvalued today, despite what may appear to be a positive catalyst.

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Morningstar Equity Analysts  Morningstar stock and fund analysts cover 2,000 mutual funds, 2,100 equities, and 300 exchange-traded funds.

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