Morgan Stanley has recently called for the return of the U.S. dollar.
In his new report to clients, Morgan Stanley's Adam Longson updates the firm's global commodities projections with this in mind.
As you'll see, it's not quite as simple as gold taking a hit.
Almost all commodities are expected to get more expensive as long as the global recovery picks up steam.
But every commodity will also be impacted by its own supply and demand dynamics.
Gold prices will continue to go up.
Projected 2013 price:
$1,773/oz
Projected 2014 price:
$1,845 /oz
Gold tends to move inversely to the USD. But there are periods in which that relationship can temporarily break down. The recent strengthening in the USD trade weighted index has not been accompanied by a downside breakout in gold, suggesting we may be entering another period of disengagement.
Source: Morgan Stanley
Oil will rise as the global economy heats up.
Projected 2013 crude price:
$109/bbl
Projected 2013 Brent price:
$123/bbl
Projected 2014 Brent price:
$118.5/bbl
More robust economic growth in 2013 — indicated by a stronger USD — will mean stronger oil demand. That will put pressure on an already tight global oil balance. Demand growth may even break out of the tepid range the oil markets have seen since 2008, MS says.
Source: Morgan Stanley
Natural gas prices will be pressured by supply buildups.
Projected 2013 price:
$3.73/mmBTU
Projected 2014 price:
N/A
MS is bearish short-term on natural gas prices owing to large build-ups, but the market should tighten as this inventory is drawn down on coal-to-gas switching.
Source: Morgan Stanley
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