Long-term Price Outlook for Gold, Copper, South African Rand

Talking points on this podcast:

• What are the long-term outlooks for gold, copper and ZAR?
• Is the South African Rand trading like an emerging-market currency?
• Where can volatility and volume be found on the Johannesburg Stock Exchange?

This time on Trading Global Markets Decoded, our host Martin Essex is joined by Shaun Murison, senior market analyst at DailyFX’s parent company IG in South Africa, armed with more than 14 years’ experience trading the financial markets.

In this episode we focus on commodity prices, forecast the long-term outlook for gold, and explore the prospects for the South African Rand and the key drivers of its price. You can listen to this podcast by clicking on the YouTube link above or by using one of the alternative platforms listed below.

Gold outlook

The discussion starts with the long-term price outlook for gold. “I don’t like to look too far into the future but I do think we are in a long-term uptrend right now,” Shaun says. “I think there’s enough stimulus and ‘fear factor’ in the market to push gold higher.

“In the short term there has been an appetite for USD as a safe haven, and perhaps gold hasn’t acted quite as investors would think through the disruption to markets,” Shaun adds.

“But I do think it’s still a hedge against inflation, and does still provide some safe-haven appeal.”

Copper outlook

How about the outlook for copper, traditionally seen as a proxy for global economic health? “At the moment you have an interesting dynamic where you have parts of the world such as China getting going again, with the economy reopening and picking up demand for base metals such as copper.

“But on the other side of the world you have the pandemic really starting to grip South America, the likes of Peru, Chile, and Brazil which are major producers of the commodity.”

The resulting supply-side disruption together with a gradual pickup in demand has seen the price rise in the short term. How much further can it go? “It could still have a little bit more to go, [but] longer term I think…we’ll really see whether the reopening of global economies is sustainable, and [if there are] infrastructure demands to support further gains in the copper price.”

ZAR outlook

When it comes to the South African Rand, 2020 was a difficult year initially. “We’ve had domestic and external factors all dovetailing, which has resulted in net selling of ZAR up until a month or so ago.”

A ratings downgrade this year of South Africa’s local-currency debt, as well as growing problems at South Africa’s state-owned businesses haven’t helped, but Shaun sees a possible turnaround. “As fear starts to subside we see strength coming into the Rand.”

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