In a notable shift in investment sentiment within the commodity space, copper has garnered significant attention from investors, emerging as the top asset for 2024, as revealed at BMO Capital Markets’ 33rd annual Global Metals, Mining & Critical Minerals Conference. Meanwhile, interest in battery metals has witnessed a decline, while gold and silver continue to maintain steady appeal.
According to feedback from the conference attendees, copper stands out as the metal with the highest potential for 2024. Analysts noted signs of investor anticipation for upside in copper prices, attributed in part to supply-side challenges and the anticipated benefits from global grid upgrade spending. Although there were indications of some investor fatigue in waiting for copper price increases, the prevailing sentiment is cautiously optimistic, with interest already shifting towards potential supply recovery dynamics in 2025.
BMO’s survey specifically inquired about the preferred commodity to hold for the next five years. The results indicated that 62% of respondents would choose copper, slightly down from 2023 figures. Gold secured the second position as the preferred asset for the long term, with 22% of participants selecting it.
In contrast, interest in critical and battery metals experienced a surprising decline compared to the previous year’s conference. Despite the significant attention these metals garnered in the prior year, there was notably less investor interest in 2024. The analysts observed a shift in focus as investors look towards a potential price floor in underperforming battery materials.
While gold remains attractive to investors, sentiments on its price are relatively neutral. Half of the attendees foresee gold prices trading between $1,950 and $2,150 per ounce, while 32% adopt a more bullish stance, anticipating a range between $2,150 and $2,350 per ounce. Interestingly, 11% expect gold prices to accelerate further, surpassing $2,350 by year-end.
BMO analysts expressed surprise at investors’ perspectives on the factors driving the gold market. While there is significant attention on the U.S. dollar and interest rates, there is minimal consideration given to central bank demand. The analysts posit that the historical correlation of gold to real rates may be outdated, emphasizing the underappreciated role of Chinese consumer demand and anticipating emerging market central bank net buying to be a quasi-annuity for gold over the coming decade.
