Trade issues hammered commodities during 2018-2019, and then the coronavirus piled on. Copper prices were down 28% in April from 2018 highs as construction stalled, but they have since recovered 33%. Oil prices plunged 75% but have more than doubled from historic lows. Meanwhile, soybean prices have remained relatively steady over the past 12 months, and the price of gold has surged as investors fled riskier assets. Commodity investors are accustomed to volatility. The last time the commodities market bottomed was in January 2016, when oil prices were below $30 per barrel and copper was below $4,500 per metric ton, according to the World Bank. But recoveries tend to be sharp. We think underlying long-term economic fundamentals are favorable for most commodities (except oil), but project ongoing volatility from the virus. A stable or falling dollar would help. Yet with the virus still spreading, risk remains high and our sector recommendation to Basic Materials is Market
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