Wells Fargo is warning against expecting a bull market for commodities this year, amid several high-profile investor bets on metals and oil.
Asked if the dollar's decline will result in a runaway bull market in commodities, the bank said in a research note, "We doubt it."
"We expect bear market dynamics (over-supply and range-bound prices) to dominate commodities for the next five to 10 years," Austin Pickle, Wells Fargo investment strategy analyst, wrote in the note.
Historically, a dollar bear run occurring alongside a commodities bull run means "exceptionally high" commodity returns, according to Wells Fargo, and a weak dollar boosts commodity prices. But despite the recent dollar levels at their lowest in more than three years, the bank does not see bull dynamics ahead for commodities, advising investors to temper their expectations.
"When the dollar bear is fighting against a commodity bear, the commodity bear historically has won, and returns have been low," the report said. The forward-looking analysis was also decidedly dollar-neutral, going against many other forecasts of a further weakening dollar in 2018.
"We do not expect a massive move lower" for the dollar, the report said.
Investors are nonetheless feeling enthusiastic in this sphere. Assets invested in commodities hit $311 billion at the end of 2017, the highest level in four years. In recent weeks, big investment banks have raised their target price for oil as crude futures have risen to multi-year highs. Bank of America Merrill Lynch and Morgan Stanley both upped their forecasts for crude prices earlier this month, while Goldman Sachs warned oil prices could soon overshoot their current targets.
Copper, palladium, platinum and gold have all seen a pickup in the last three months, and Barclays forecasts rising manufacturing activity in many regions will continue to support commodity growth through 2018. Still, Barclays and others have warned that a possible China slowdown on the horizon risks bringing copper and oil back down from their current highs.
Meanwhile, DoubleLine Capital CEO Jeffrey Gundlach has made a confident call for commodities, telling clients during a webcast this week that there's "quite a lot of high octane [gas] in the commodities versus stocks tank" and predicting "one or two more bad years" for the dollar.
The dollar strengthened only modestly following the release of a more hawkish than expected policy signal and confidence on inflation from the Federal Reserve's meeting on Wednesday.
CNBC's Sam Meredith contributed to this report.