The metal’s plunge after the longest bull rally in at least nine decades has kept it below the 200-day moving average since February. Prices may climb to $1,500 in June after forming a “double bottom,” a pattern that shows a drop, a rebound and then another decline approaching the previous low, according to R.J. O’Brien & Associates.
The price drop is hurting producers contending with rising costs. Barrick Gold Corp., the biggest miner, is considering shrinking in size as it focuses on returns over production volumes, Chief Executive Officer Jamie Sokalsky said May 21 at the Bloomberg Canada Economic Summit in Toronto.
In other commodities, eight of 12 people surveyed expect raw sugar to drop next week and two were neutral. The commodity slid 14% to 16.82 cents a pound on ICE Futures U.S. in New York this year.
Fifteen of 30 surveyed anticipate higher corn prices next week and 12 said the grain will drop, while 15 of 31 said soybeans will rise and 12 expect lower prices. Thirteen traders predicted declines in wheat and nine were bullish. July corn fell 5.3% to $6.6025 a bushel this year in Chicago as soybeans rose 6% to $14.935 a bushel. Wheat is down 9.2% at $7.0675 a bushel.
Fifteen traders and analysts surveyed expect copper to climb next week, 12 were bearish and one was neutral. The metal for delivery in three months, the London Metal Exchange’s benchmark contract, slipped 8.1% to $7,285.25 a ton since the start of January.
The S&P GSCI gauge of raw materials fell 2.1percent since reaching a five week high May 20. This year will probably signal “death bells” for the commodities supercycle, or longer-than- average period of rising prices, Citigroup Inc. said in a report that day. Hedge fund wagers on higher prices across 18 commodities are about 33% below the five-year average, CFTC data show.
“Our main view has been for a trough in commodities in the second quarter, with higher values towards year-end,” said Bjarne Schieldrop, the Oslo-based chief commodity analyst at SEB AB. The “expectation is for monetary stimulus to continue through 2013. A U.S. recovery is positive, the question is the time lag before impacting commodities.”