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Commodity Trends

How Far Will Prices Fall?

December 14, 2022
Marc-Antoine Dumont, Economist • Florence Jean-Jacobs, Principal Economist

  • As a global recession looms in 2023, the prices of several commodities remain at historically high levels.
  • In a challenging economic environment, oil prices continued to decline. They are expected to resume their downward trend in early 2023.
  • While global demand for industrial metals is weakening and the Chinese and European economies are showing signs of slowing, supply remains tight and inventories are low. As a result, there’s limited potential for lower prices for several metals such as aluminum and copper.
  • Deteriorating economic conditions, the end of US monetary tightening and the plateauing US dollar are all factors that should contribute to the rise in gold prices in the first half of 2023.
  • Softwood lumber prices have slumped, but certain factors are likely to support some recovery in prices starting in the summer of 2023. Many intangible factors could influence grain prices in the weeks and months ahead.

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