Barclays Is Negative About Commodities in Q3. Sees Best Upside Potential for Copper

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Barclays Is Negative About Commodities in Q3. Sees Best Upside Potential for Copper

Barclays see the greatest upside potential in the commodity area for Copper. In a research report revealed today, 12 July 2015, Barclays has shared its negative outlook for commodities in Q3.

On April 20, Barclays announced plans to to exit most of its commodities activities which is in line with the negative expectations revealed. Commodities revenue at the 10 largest banks fell 18 percent last year amid reduced volatility, Coalition, a London-based analytics company, said in February. At the same time, regulators are concerned that lenders might control prices if they both own and trade raw materials, or suffer losses that would endanger the financial system. Deutsche Bank AG and Bank of America Corp. are exiting some commodities activities, while JPMorgan and Morgan Stanley are selling units.

Regarding Gold, analysts from the bank said: “We see Q3 as the weakest quarter for gold, given rate hike expectations and weak price floor,”. The banks analysts expect difficult quarter for gold, which is also shared by other investors, one of which is Jim Rogers, who sees a possible 15% more correction for gold to about $1000 per ounce.

“There is little sign of any pick-up in investor interest. ETF flows for the year to date have fallen below 10 tonnes and there have been net outflows over the past two months, despite all the Greece rhetoric,” they noted.

“In our view, U.S. monetary policy still holds the key for gold and prices are unlikely to move out of their recent trading range until the Fed’s path becomes clearer,” the analysts said.

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