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Outlook for agricultural and precious metal sectors positive in 2008


In a report published today, Deutsche Bank predicts 2008 will be another year of strong commodity price gains, most notably in the agricultural and precious metal sectors.

Michael Lewis, Global Head of Commodities Research at Deutsche Bank, who wrote the research found that:

* Rallies in the agricultural sector are still in their infancy and as the fight between feeding people, cattle and cars intensifies, Deutsche Bank expects new price highs to be achieved across the sector. The report predicts a constructive outlook in corn, cotton and soybeans.
* As a result of its belief that central banks may have to intervene to rescue the US dollar and falling US real interest rates, Deutsche Bank is positioning for new all time highs across the precious metal complex. As the risk of further dollar weakness has not been exhausted yet, the bank sees the gold price overshooting this year and expects fundamentals in platinum to remain tight into 2009.
* Deutsche Bank expects prices in natural gas will eventually benefit from inadequate capacity additions from proposed coal projects and wind power, which are required to meet electricity generation needs.
* Even though the possibility of recession in the US poses the greatest risk to the industrial metals sector, in the event that the rapid US rate cuts can avert a growth dip, then rallies in this sector will occur sooner than expected. Deutsche Bank predicts the sector will recover in 2008 when US growth recovers, the Federal Reserve Bank stops cutting interest rates, equity markets stabilise, and Chinese demand returns. The report predicts a constructive outlook on aluminium and copper.
* Deutsche Bank believes the run up in oil prices during the fourth quarter of 2007 goes beyond what can be explained by the decline in the US dollar and the level of global growth. However, refinery capacity, oil production constraints and geopolitical issues continue to play a very important role in boosting pricing. Deutsche Bank predicts prices will average US85/bbl this year.

For further information or a copy of the research, please contact:

Deutsche Bank

Stacey Coglan +44 (0) 207 545 8226
Press and media relations

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