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Investing.com - Bank of America’s latest commodity model indicates investors should overweight gasoline, gasoil, soybean meal, and gold over a one-month holding horizon, according to a report released Thursday.
The bank’s analysis recommends underweighting several commodities including Brent crude, natural gas, lean hogs, corn, wheat, Kansas wheat, coffee, cotton, and aluminum during the same period. For roll yields over the next month, the model forecasts positive returns for Brent, gasoline, and copper, while projecting negative roll yields for WTI, heating oil, gasoil, live cattle, soybeans, soybean oil, cotton, nickel, zinc, and lead.
BofA’s model projects positive excess returns over the next month for WTI, Brent, heating oil, gasoil, and copper. The forecast extends beyond the immediate horizon to provide guidance on longer-term commodity performance as well.
Looking at a six-month timeframe, the bank’s model anticipates positive spot returns for energy commodities, live cattle, and most agricultural products. The longer-term outlook specifically projects positive excess returns for Brent, gasoline, gasoil, heating oil, nickel, silver, soybeans, and soybean meal over the six-month period.
The model simultaneously forecasts negative excess returns over the six-month horizon for WTI crude, zinc, and aluminum, suggesting investors may want to adjust their commodity portfolios accordingly based on their investment timeframes.
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