Don't shoot the messenger!
Commodity collapse tipped
By Andrew Trounson
May 02, 2006
COMMODITY prices were likely to peak this year and were primed for a fall of up to 50 per cent, analysts warned yesterday as resource stocks again jumped sharply higher.
The gold price hit a 25-year high at $US661.10 an ounce, sparking fresh buying of mining stocks, despite a warning from Canberra-based Access Economics that metal prices are poised to start dropping steeply from the end of the year.
Gold shot up on the back of growing fears over the nuclear standoff between the US and Iran, and expectations that US rates are on hold.
This year will be as good as it gets in metal markets, according to Access's latest quarterly survey of 10 forecasters. Booming copper prices are forecast to fall about 50 per cent over the next two years, with other base metals to fall 30-40 per cent. Gold is forecast to be averaging $US564 an ounce a year from now.