Commodity price forecasts — Positive outlook for metal prices, apart from gold

The gold price performed well at the start of 2017, but the yellow metal's price has fallen since the end of February, with the price closing at US$1,219/oz on March 7, compared with US$1,245/oz on March 1. The decline is widely attributed to expectations of higher interest rates and inflation and to the strengthening U.S. dollar.

There are positive forecasts for copper throughout 2017, 2018 and 2019, with anticipated average prices of US$2.50/lb, US$2.62/lb and US$2.73/lb, respectively. The copper price has been volatile recently due to supply disruptions and weak physical demand in China. The strike at the Escondida mine in Chile and halted operations at Grasberg in Indonesia are among the factors majorly affecting the tightening global copper supply, which has boosted the metal's price.

Metals linked to infrastructure, including iron ore, nickel and aluminum, have performed particularly well following President Donald Trump's reaffirmation of his administration's commitment to expenditure on infrastructure in the U.S.

Iron ore's 2017 price forecast of US$61.55/tonne is significantly higher than the 2016 average of US$56.70/tonne. This increased price expectation is attributed to continued Chinese demand and likely mine interruptions in Brazil and Australia. Nevertheless, some analysts are unconvinced that the recent increase in price is sustainable, as it will likely bring additional iron ore supply to the market. This is reflected in a lower 2018 price forecast for iron ore of US$55.94/tonne.

A similar trend can be seen for cobalt and lead, with 2017 price forecasts of US$14.39/lb and US$1.00/lb, respectively, being much higher than average 2016 prices. Other metals, including molybdenum, tin and uranium, have positive price expectations throughout 2017, 2018 and 2019.