UBS Strategists Predict Major Commodity Sectors to Bottom Out Soon, Strong Growth Expected by 2025
UBS analysts are forecasting a positive outlook for major commodity sectors, with a projected recovery and growth expected by 2025. Despite recent challenges, such as weak performance in most categories, except for precious metals, the energy sector is expected to rebound. Key drivers for this recovery include rising compliance among OPEC+ members and a decline in global oil inventories.
The industrial metals sector has also been affected by disappointing data from China, but UBS remains bullish on its growth potential. The ongoing energy transition towards a net-zero global economy is expected to drive demand for industrial metals like copper, lithium, and aluminum.
Gold has shown resilience in 2024, with UBS forecasting further price increases as central banks build reserves and Fed rate cuts stimulate demand from ETF investors. Silver is also expected to benefit from improving industrial production.
UBS is cautiously optimistic about agricultural commodities, citing weather-related risks in Latin America. Despite mixed performance, some soft commodities like sugar are expected to see price increases over the next six months. UBS has a moderate overweight recommendation in this sector.
Overall, UBS analysts anticipate double-digit returns for industrial metals and expect oil prices to surpass $80 per barrel. Investors should keep an eye on these sectors for potential growth opportunities in the coming months.