Turning Bullish Mining Equities
We have entered a bullish mining equities view into our global sector strategy table, played through the MSCI World Metals and Mining Index. Mining equities look set to head higher over the coming weeks as investors return to the sector that has been in a bear market for three years.
As we recently highlighted, mining equities look poised for a relief rally in Q314, albeit within the confines of a longer-term downtrend ( see 'Mining Equities Shaping Up For A Relief Rally', July 1 2014). A break higher by the MSCI World Metals and Mining Index illustrates that several factors are aligning that should temporarily boost sentiment towards mining equities after three years of decline.
The catalyst for stronger investor demand for mining equities is resilient metal prices. We expect further gains for copper, aluminium, iron ore, lead and zinc prices in the coming weeks. All these metals will benefit from an uptick in Chinese manufacturing activity and commodity-specific factors ( see 'Metals Resilience To Persist...For Now', June 27). Meanwhile, gold prices should hold up in the USD1,200-1,375/oz area ( see 'Gold To Average USD1,200/oz In 2015', July 7 2014).
|Further Gains Ahead|
|MSCI World Metals And Mining Index (weekly chart)|