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For more on the commodity strait. Let's bring in, Francisco Blanch. He's head of commodities and derivatives research at B of A Securities. Francisco, thank you so much for joining us here. Obviously you do all commodities, but I would like to talk about gold because for so much of the year we've just seen this continuous run. Obviously a little bit of a pullback. I'd love to get your take on the year so far and then what we've seen in the last couple days and then lastly, what it portends for going forward. So give me a little past present and future prediction here.

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Francisco Blanch

Sure. So let me start by saying that gold is both overbought but also underowned. And this means that you probably still want to own it in the long run, and that's why we've revised in the last couple of weeks our forecast up by about a thousand dollars an ounce to 5000.

Francisco Blanch

We've been bullish on gold throughout. The rise happened faster than anticipated. The extraordinary volatility on the way up coupled with declining volatility on the way down makes us think the market is a little overbought right now and frothy. Massive inflows in past weeks triggered the last runup in August, September, and early October. It feels retail-ish to be honest. Fundamentals include fractures in global geopolitics between US and China, new sanctions on Russia, and central banks' search for alternatives to USD and euro denominated assets supporting gold. But we think gold will consolidate at these levels or maybe a bit lower.

For a long time, gold was seen as a portfolio hedge. Is it more than a hedge now? If in three months it's up 22%, should advice differ for including gold in a portfolio?

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Francisco Blanch

Gold makes a lot of sense in a portfolio, but I don't think it makes sense to chase gold prices higher. We've seen volatility in equity markets, miners, nuclear stocks, AI stocks, and gold market behavior is similar. Silver is joining that rally. I recommend buying dips and establishing a formal core position in gold over time. Gold is money; it maintains value over very long periods. I wouldn't look for gold to generate wealth, but rather as protection against uncertain future events.

I was going to ask if we will hit 3800 before 4500 in gold, but your price target is 5000. Moving to energy, WTI crude, we've seen a lot of movement and now headlines about opening the Arctic coast for drilling. What do you make of that? What's your prediction for energy price direction?

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Francisco Blanch

We've been bearish on oil the whole year and it has mostly played out that way. There have been hiccups like sanctions on Russian producers in top positions reducing supply, causing price rallies. Sanctions take effect November 21st causing refiners in India and China to scramble for alternative oil sources including US crude. But no one really knows the full impact; Russia and Iran may find ways around sanctions. Potentially prices stay higher for 2-3 months. Meanwhile, OPEC+ is adding production steadily leading to an oil surplus. So we're not expecting shortage of crude oil. This is probably part of why the White House has made certain moves.