In many ways, gold has been the watchword for many commodity investors in 2024. The world’s premier precious metal has been a long-standing haven for wealth, is increasingly favored by central banks, and has recently crossed $2,300 with an eye for $3,000.

Despite this, the analysts of the banking behemoth Morgan Stanley (NYSE: MS) are, at press time, significantly more bullish on copper’s performance in the third quarter of 2024 as they predict a rise in excess of 10% in the coming 12 months.

Indeed, the expectations for a significant rise in the price of copper have been commonplace for some time as the versatile metal appears to be in a bit of a perfect storm. 

On the one hand, it has many critical uses, not the least of which being in the manufacturing of solar panels, wind turbines, and – perhaps most notably given the ongoing artificial intelligence (AI) boom – semiconductors and circuit boards.

On the other hand, there are long-standing fears about the future output and stability of copper mining operations, particularly in Latin American countries including Chile and Peru, driven by tax and political stability concerns.

In fact, since January, some forecasts have been projecting a 75% surge in the price of the commodity by 2025.

Generally, though still not at its February 2023 highs, the price of copper has been on the rise in recent months and surged 8.8% year-to-date to $9,281.36 per metric tonne.

Copper YTD price chart. Source: Business Insider

While gold is not at the top of Morgan Stanley’s nice list for Q3 2024, it has taken second place among the commodities the bank is most bullish about. This hardly comes as a surprise given that not only has its price been going up, but the stage is set for a continued surge.

Q3 2024 commodities outlook. Source: Bloomberg and Morgan Stanley Research

Geopolitical instability is at the forefront of people’s minds in a way it hasn’t been in decades both among the U.S. allies and adversaries, and there is also significant internal instability in many countries driven by fears of resurgent inflation, economic pain inflicted by the ending of pandemic-era stimulus packages, and general recessionary fears.

Finally, the bearish forecast that would see Uranium drop more than 10% in the coming 12 months comes as a bit of a surprise given that the commodity has been performing rather well this year and Morgan Stanley was itself among the institutions forecasting a bull market for the radioactive metal as recently as January.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.



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