Equity Resource Engineer | Gold remains precious
Global growth remains weak and volatile with major economies maintaining easing bias. China, Europe and Japan are expected to deliver more QE and stimulus while the US remains in low interest rate outlook for longer than expected. The short term bounce in commodities on the back of a weak USD is unlikely to last in the medium to long term. Global downgrades and rising USD strength continues to weigh on non-precious commodities. Equities linked to non-precious commodities struggle to provide earnings clarity despite the recent bounce from the Chinese New Year. The lack of any supply side action despite falling demand will continue to deliver negative growth outlook. The risk of the US Fed move, the negative outlook for non-precious commodities and the stretched multiples after recent bounce supports the view to reduce exposure and come back when the outlook gets more clarity. The gold sector remains the only commodity with positive macro, growth, value and safety aspects. (VIEW LINK)
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