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Real Time Insight

After the big sell-off in gold and commodities generally, it is time to evaluate the state of the biggest global-macro driven markets.  There is clearly a shift in thinking sweeping over these markets this week.

Let’s look into the following consensus global-macro forecasts for FX, Energy, Base Metals, and Precious Metals. 

From consensus outlooks on these four groups --all partly driven by global GDP growth-- we can get a sense of what’s brewing inside global GDP growth too. 

Each prediction typed in below is drawn up in terms of a 12 to 15 month future outlook. 

FX - In terms of the U.S. dollar (USD), 2013-14 FX consensus outlooks show us a rich set of stories. 

USD weaker against strong Asia-Pacific countries: India, China.
USD strength coming against overvalued commodity currencies: Australia, Brazil, and Russia. 
A move back to USD/CAD parity seen with Canada. 
Volatility in Euroland. Fresh lows for UK pound.  Central bank intervention in Switzerland.
Weak Japan Yen - Abenomics -- it may be overdone for now.

Energy -  Prices to be seen in June 2014.

WTI Crude: $95 a barrel 
Gasoline at the Pump: $3.82 a gallon
Natural Gas: $3.95 per MMBtu, up +18% y/y


Base Metals -  The consensus sees the following patterns playing out to the end of June 2014.

Copper prices falling (-2.43% CAGR from spot), from $8,076 per metric ton to $7,831.

Tin prices down (-4.06%)
Lead prices down (-2.81%)

Aluminum prices rising (+4.00%)
Nickel prices rising (+1.26%) .


Precious Metals -  This one is a tough sell at this point!

After the big sell-off, consensus forecasts for gold from mid April 2013 to end June 2014 sees a potential +21.76% CAGR from spot, from $1360 to around $1656.

Consensus for silver calls for a market, with +30.40% appreciation potential by the end of June 2014.            

Platinum and palladium consensus sees appreciation potential of +14.74% and +14.28%, respectively.

After such a massive sell-off, led by gold, a ripe debate exists on where to find value.

My Real Time Insight question for you today--

(1) What part of the consensus global-macro do you MOST disagree with?  Why? 
(2) Importantly, what investment comes to mind to exploit global-macro driven markets?

 

Zacks Releases Their 7 Best Stocks for September, 2014

These 7 were hand-picked from the list of 220 Zacks Rank #1 Strong Buys with earnings estimate revisions that are sweeping upward. Their stock prices are expected to rise sooner than the others.

Today, this Special Report is available to new Zacks.com visitors free of charge.

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