Goldman Sachs reportedly is forecasting a Bull market for commodities in 2021 based on its outlook for a weaker USD, inflation, and the prospect of further economic and fiscal stimulus.
Analysts at the bank Thursday predicted a 12-month return of 30% on the S&P’s Goldman Sachs Commodities Index, recommending long positions on silver, copper, gold, US nat gas, Brent crude and jet regrade
Goldman expects base metals and agriculture to have “more near-term upside than oil, with smaller inventories to move through before prices begin to rise.”
“Given that inventories are drawing this early in the cycle, we see a structural bull market for commodities emerging in 2021,” analysts led by Goldie’s head of commodities research said in a research note.
“We see trends in rising social need, alongside investor complacency over inflation, as raising the political risks of policy with an inflationary bias,” the analysts wrote. “Accordingly, we expect an increased rotation into commodities as an inflation hedge.”
Gold is seen as one of those hedges, and has seen its price shoot up by 26% YTD. Goldman expects the metal to average a price of 2,300oz in Y 2021, up from its predicted average of 1,836oz this yr.
Thursday, the benchmark US stock market indexes finished at: DJIA +152.84 at 28363.60, NAS Comp +21.31 at 11505.93, S&P 500 +17.93 at 3453.49
Volume: Trade on the NYSE came in at 844-M/shares exchanged
HeffX-LTN’s overall technical outlook for the major US stock market indexes is Bullish with a Very Bullish bias.
- NAS Comp +28.2% YTD
- S&P 500 +6.9% YTD
- DJIA -0.6% YTD
- Russell 2000 -2.3% YTD
Looking Ahead. Investors will receive the preliminary Market Manufacturing and Services PMIs for September Friday
Have a healthy day, Keep the Faith!