July 2019

<strong>Gold, Corn Set to Buck Receding-Tide Risks for Commodities in 2H</strong> (Bloomberg Intelligence) -- The primary concern for broad commodity prices in 2H is the sagging state of global economies, and as the tide continues to ebb, gold has plenty of upside potential and agriculture shouldn't care, in our view. The commodity trend has shifted downward with sovereign debt yields. Commodities are set to outperform equities as the Federal Reserve shifts to ease, adding headwinds for the lofty dollar. Metals should be the stalwart if the greenback peaks. A final pillar supporting the dollar is U.S. equities outperformance vs. the world, which enhances the potential commodity vs. stock market divide in 2H. Crude oil at about $60-a-barrel resistance is vulnerable, particularly if risk-off from 2H18 turns out to be a warning shot. A U.S.-China trade deal may change things, but is unlikely.