The coronavirus outbreak should accelerate prevailing bullish gold and bearish industrial-metal trends, in our view. Having retraced the big plunge of 2013 and sitting near $1,700 an ounce, some back-and-fill in gold is likely. About $1,600 an ounce is initial support, and margin-call headwinds akin to 2008 from sinking risk assets should prove temporary for gold. Increasingly negative real yields, rising stock-market volatility and Federal Reserve easing represent a firming base for the precious metal.
We expect headwinds to prevail in copper and industrial metals, which will continue to follow bond yields lower, if history is a guide. Base-metal prices appear elevated vs. yields, their deflation-indicating companions. Copper is set to transition below key support of $2.50 a pound.
KEFI Minerals plc (LON:KEFI) is an exploration and development company focussed on gold and copper deposits, primarily in the highly prospective Arabian-Nubian Shield.