Metals, gold, and oil have long-term staying power despite economic
headwinds, says Bart Melek, BMO's Global Commodity Strategist
HOLLYWOOD, FL, Feb. 26 /CNW/ - Join Bart Melek, Global Commodity
Strategist, BMO Capital Markets, by conference call for an update on his
outlook for the global commodities sector.
Speaking from BMO's Global Metals and Mining Investor Conference in
Hollywood, Fla., Mr. Melek will provide a brief commentary and then take
questions on Tuesday, February 26, 2008 at 10 a.m. (EST).
BMO provides its outlook for the Global Commodities Sector
Media conference call with Bart Melek, Global Commodity Strategist, BMO
Tuesday, February 26, 2008
10 a.m. (EST)
Conference Call Number:
888-789-9572 or 416-695-7806
Passcode: 3253458 followed by the pound key.
Mr. Melek will discuss:
- Metals, gold and energy show strength for now despite recession fears
As nervous investors contemplate what a U.S. recession may mean for
corporate earnings and financial markets in general, they have
lightened their holdings of everything that is dependent on a robust
U.S. economy. In sharp contrast, commodities, which are normally
susceptible to downturns, are more than holding their own.
- Slowing economy to place downward pressure on metals later this year,
but long-term prospects remain upbeat
Notwithstanding the recent speculative rally driven by supply worry,
BMO Capital Markets' analysis shows that the decelerating U.S. economy
is set to whittle down global demand growth for metals this year.
Nonetheless, BMO Capital Markets' analysis shows that robust domestic
consumption and infrastructure spending in countries such as China,
India and Russia will keep demand strong long-term, while labour
scarcities, technical, regulatory and environment challenges will keep
supply growth modest. As such, metal markets will continue to be quite
- Gold to maintain an upward trajectory
BMO Capital Markets projects gold and the precious metals complex in
general to continue following an upward trajectory in 2008. This
optimism regarding precious metals is primarily driven by the view
that the U.S. dollar will remain in a weakened state for the
foreseeable future and growing inflation pressures will be supportive
Also looming large in the decision to be bullish in gold is that
jewellery sales and the use of gold and other precious metals as a
store of wealth in emerging India, growing China, and the rest of the
developing world are expected to become increasingly important as
personal wealth there grows.
- Oil has long-term staying power
BMO Capital Markets projects oil prices to moderate from current
levels once the impact of Venezuela's threats to stop supplying the
U.S. is out of the market, and the slowing economy starts showing up
in demand numbers later in the year. Crude is expected to average
$87bbl this year, about $10 higher than in 2007. As is the case with
the metals sector, demand for oil is coming from the developing world
at a time when supply growth is limited.
- Global economy down, but not out
BMO Capital Markets expects the world economy to decelerate in the
months ahead as the shock waves radiating from the U.S. housing market
and the securitized debt market reverberate through the global
financial system. Growth is projected to hover just above 1 per cent
in the U.S. and under 2 per cent in Western Europe, while Japan is
expected to settle under 1 per cent, as fallout from the subprime
meltdown tightens credit market conditions and activity.
Full copies of Mr. Melek's latest reports on his "Global Commodity
Strategy" and the "Copper Review and Outlook" are available upon request.
A playback of the call and one-on-one interviews will be available.
Bart Melek has closely analyzed trends in global commodity and financial
markets, as well as in the global and Canadian economies, for more than a
decade. He contributes to BMO Capital Markets' strategic view by providing
commentary on commodity markets and how they relate to the sectoral and
For further information:
For further information: Media Contacts: Kim Hanson, Toronto,
firstname.lastname@example.org, (416) 867-3996 or (416) 624-8905; Holly Holt, New York,
email@example.com, (212) 885-4153; Internet: www.bmocm.com