Commodity Price Review

Recovery Placing Commodities on Higher Trajectory

BMO Research has updated its commodity price outlook for 2010E and beyond.

1. The industrial commodity price outlook has been upgraded due to the
return of double-digit growth in China, aggressive restocking and a
stronger-than-expected recovery in the U.S. A weak U.S. dollar, supply
concerns and growing interest in commodities as a bona fide asset class
are additional positive factors.

2. Gold and other precious metals projections have also been upgraded
materially amid U.S. dollar concerns, an eventual move toward higher
inflation, rising U.S. debt, central bank buying and improvements in
jewellery and industrial demand.

3. Copper, platinum, silver, iron ore and metallurgical coal are our top
commodity picks, driven by tighter fundamentals. Long-term copper has
been increased to US$2.50/lb, reflecting high project costs.

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