Commodity bull Goldman says 'we were wrong' but sticks to view
Photo by Creamer Media
As a magazine-and-online subscriber to Creamer Media's Engineering News & Mining Weekly, you are entitled to one free research
report of your choice. You would have received a promotional code at the time of your subscription. Have this code ready and click
At the time of check-out, please enter your promotional code to download your free report.
Email firstname.lastname@example.org if you have forgotten your promotional code.
If you have previously accessed your free report, you can purchase additional Research Reports by clicking on the “Buy Report” button on this page.
The most cost-effective way to access all our Research Reports is by subscribing to Creamer Media's Research Channel Africa - you can upgrade your subscription now at this link.
The most cost-effective way to access all our Research Reports is by subscribing to Creamer Media's Research Channel Africa -
you can upgrade your subscription now at this link.
For a full list of Research Channel Africa benefits, click here
If you are not a subscriber, you can either buy the individual research report by clicking on the ‘Buy Report’ button, or you can
subscribe and, not only gain access to your one free report, but also enjoy all other subscriber benefits, including 1) an electronic archive of back issues
of the weekly news magazine; 2) access to an industrial and mining projects browser; 3) access to a database of published articles; and 4) the ability to
save articles for future reference.
At the time of your subscription, Creamer Media’s subscriptions department will be in contact with you to ensure that you receive a copy of your preferred Research Report. The most cost-effective way to access all our Research Reports is by subscribing to Creamer Media's Research Channel Africa - you can upgrade your subscription now at this link.
If you are a Creamer Media subscriber, click here to log in.
Commodity cheerleader Goldman Sachs Group said its forecasts for major rises in raw materials this year hadn’t panned out well so far, but coupled that assessment with another call for a major rally.
“Bulls, like ourselves, find comfort in the fact that end-use demand across the commodity complex has not shown recessionary signs and investment in supply remains elusive,” analysts including Jeffrey Currie said in a note. “But this misses the point that we were wrong on price expectations.”
Commodities have sunk this year, with a Bloomberg gauge tumbling by almost 10% to hit the lowest since 2021 this week. The declines in energy and metals have been driven largely by China’s weaker-than-expected emergence from Covid Zero and concerns that the US is now headed for recession after an aggressive round of rate hikes from the Federal Reserve to contain inflation.
“Prices continue to move against our forecasts,” the analysts said in the May 23 report, pinning the probable explanation for their miss on an unprecedented clear-out of stockpiles and positioning. “What is the explanation? It is likely the largest commodity destocking the complex has ever witnessed.”
Against that backdrop, Goldman analysts expect commodities to come roaring back should recession concerns prove to be misplaced. “The absence of a recession would likely lead to higher oil and commodity prices as well as higher rates, to which equities would likely react poorly,” they said. They are now forecasting that the S&P GSCI gauge of commodities will return 30.3% on a 12-month horizon.