They stated they favor commodities under “supply constraints”
However, Morgan Stanley is urging investors to become more selective when making investment choices going forward into the New Year. Do not purchase the hype; purchase stability. You will find a lot of possibilities for savvy investors right now, but you will find a lot of risky ones too. You have to pay attention to the supply and demand curve to make sure you are making a smart investment. Gold and silver appear to be safe bets across the board, and we're staying long on these two till the supply crunch subsides.
From Kitco: “We have a more optimistic outlook for platinum group metals, as supply problems in South Africa have assisted get rid of surpluses in all significant PGM markets,” analysts stated in their report. “We anticipate deficit markets to continue in 2013, with upside benefits for prices. Industrial demand continues to be firm, and supply is constrained by South African labor problems, decreased sales from Russian stocks and lower recycling rates.”
For the time being, Morgan Stanley analysts described themselves as “relatively cautious” on base metals due to a “guarded view” of first-half international financial development and also the complex’s powerful correlation to international macroeconomic trends.
“The downside dangers to pricing are only amplified by a structural oversupply evident in most base metals markets, using the important exception of copper and maybe lead,” Morgan Stanley stated. “Upside for next year might be discovered in the second half of 2013 as our international economists are forecasting a pick-up in industrial activity.”
On the other hand, Morgan Stanley desires to remind investors that the aluminum marketplace is presently “oversupplied and over-produced,”