- Where to for copper prices?
After getting tantalisingly close to the all-time high of USD10,170 per tonne (461 US cents per pound) set in 2011 copper fell 8.6% from its peak of USD9,614.30 per tonne on 25 February 2021 to USD8,786.50 per tonne on 4 March 2021 only to rebound to USD9,021.50 per tonne the next day. This was no doubt caused by a short-term flight to lower risk investments after a spike in bond yields. Low copper inventories and expectations of increased industrial demand driven by expected economic growth driven by central banks and governments have fuelled the recent price rises. However from the end of 2021 until 2024 it is forecast that new probable projects will make up the shortfall between demand and production capacity. As a result copper prices are expected to drop to around USD8,000 per tonne by 2024. Beyond 2024 there is likely to be a widening gap between production capability and demand which will drive copper prices higher in real terms.
- Vickery Coal Mine class action
In August 2020 the NSW government approved the Vickery Coal Mine extension with a raft of conditions being imposed. On March 9 2021 in the Federal Court eight teenagers commenced a class action against NSW Environment Minister Sussan Ley claiming her approval of this mine violates her duty of care to future generations. On 27 May 2021 Justice Mordecai Bromberg found that while the minister does have a duty of care to protect young people from climate change, he had not been convinced that approval of the Vickery mine would breach the required level of care. The Environment Minister is currently challenging the Federal Court decision that that she has “a duty to take reasonable care to avoid causing personal injury to children”.
- Gold Prices - Expect further falls
In August 2020 gold hit an all time high of USD2070. Since then gold prices have declined to an average of around USD1800 +/- USD50 between the beginning of March 2021 and the end of June 2021. This has been mainly due to the combination of rising US treasury yields, which make holding gold ore expensive, and the increasingly positive outlook for economic recovery in the US.
As of mid-November gold is trading at around USD1870 per troy ounce. Over the next 6 to 12 months gold is expected to fall as the strength of the US dollar recovers from the "quantitative easing" that saw the US Federal Reserve engage in an extraordinary money printing exercise.
The improvement in the US dollar is no doubt in response to the stimulus measures being implemented by the Biden administration.
The current $1870 level may be supported in the very short term, but it is likely to fall to around USD1,800 by the end of 2021. It is expected that the gold price will then gradually increase to finish at around USD1,900 by the end of 2022.
- AUD vs USD predictions
At the end of the first quarter of 2021 the Australian Dollar was trading at about 77 US cents. In March 2020 it was trading at 60 US cents, before hitting a peak at 80 US cents on 26 February this year. That run was due to a falling US Dollar. That is now over. In mid July 2021 the Australian Dollar was trading at about 75 US cents. Three of the big four Australian banks predict that the Australian Dollar will be 72 US cents by the end of 2021 with ANZ predicting 70 cents by the end of 2021.
Wallet Investor, an online forecasting service, sees the Australian Dollar falling to 69 US cents by the end of 2021 and 65 US cents by the end of 2022.