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How bad are analysts at forecasting commodity prices? Really bad

Posted on 21 March 2014

Over the last ten years, consensus has been the best at forecasting prices for aluminium, zinc and nickel and the worst at forecasting copper, iron ore, gold and silver. The average error over a 1 year time frame for aluminium has been 4%, and over a 2 year period 5%. For Zinc this is 2% and 4%, Nickel 5% and 3%.
By contrast, the error on the copper forecast has averaged -7% and -19% and iron ore -8% and -21% for 1 and 2 year horizons, respectively. This suggests that a counter consensus view on aluminium, zinc and nickel prices is unlikely to be the correct course of action, while it for copper and iron ore one has to be contrarian to stand any chance of being right………………………………………..Full Article: Source


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VRS - who has written 38538 posts on Opalesque Commodities Briefing.


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