TD Securities anticipates commodities generally losing some of the shine that resulted from a last-minute deal to avoid the U.S. fiscal cliff, according to a Kitco News report.
Kitco noted metals and oil rose Wednesday but are mostly on the defensive early Thursday. It said the fiscal-cliff agreement limited tax hikes for most Americans, but the future of any spending cuts and debt limits must still be determined, which could mean another stand-off that curtails some of the recent euphoria.
It cited TDS saying: "we do not see commodities staying elevated on the recent headlines alone. As a result, commodities like copper and oil are likely to rescind at least some of the hype stemming from the recent deal struck on Capitol Hill."
Gold, however, could be less likely to lose its shine following Washington's close call with the fiscal cliff, TDS reportedly said. "The ominous debt ceiling debate and the fiscal drag stemming from higher payroll taxes and higher income taxes will further support an easy Fed policy, which is supportive for gold."
TDS is reportedly looking for volatility in commodities to increase as political posturing resumes. "But odds are good that the longer-term outlook will improve further by April, which will be supportive for industrial precious metals, base metals and oil."
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
