BMO Forecasts Commodity Bull Run Decline, Flat Metals Prices

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BMO Financial Group has forecast the end of the four-year bull run for commodity prices, and declared that “the outlook for commodity prices in 2007 is mixed.”

BMO Financial Group has forecast the end of the four-year bull run for commodity prices, and declared that “the outlook for commodity prices in 2007 is mixed.”

In fact, the BMO Financial Group is expecting its Commodity Price Index to decline by 4% this year, which the Group’s Rick Egelton, Senior Vice-President and Chief Economist, said was “only a small step back considering its average annual increase of 18% during the past four years. However, as in 2006, volatility will remain high.”...

“Following an average gain of close to 50% in 2006, the Metals & Minerals Index, on average, is expected to stay flat at a high level this year, although the monthly pattern will show an easing trend,” the BMO economists said. “Prices will remain supported by continuing healthy global demand, relatively low stockpiles, and lags in the supply response.”

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