Commodities are poised to enter a structural bull market thanks in part to the weakening US dollar and rising inflation risks, according to Goldman Sachs Group.
|UUP||INVESCO DB US DOLLAR INDEX BULLISH FUND – USD ACC||24.93||+0.03||+ 0.12%|
|UDN||BEARISH POWERSHARES DB US DOLLAR FUND||21.24||-0.03||-0.14%|
The company expects the S&P Goldman Sachs Commodities Index to jump 28% over the next 12 months, led by energy (+ 43%) and precious metals (+ 18%). Agriculture (-0.8%) is the complex within the commodity space where lower prices are expected to occur.
The bull market will be fueled by structural underinvestment in the old economy, policy-driven demand and favorable winds of a weaker dollar and rising inflation risks, analysts led by Jeffrey wrote. Currie.
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“These drivers remain consistent with our optimistic views earlier this year, and have now been intensified by the disruption of COVID-19 and the global political response that followed,” they said.
Tighter stocks for nearly all major commodities, many of which are in deficit, mean that unless demand slumps markets will likely continue to rebalance even if there is another wave of COVID infections. -19.
|GLD||SPDR GOLD SHARES TRUST – EUR ACC||175.69||+0.53||+ 0.30%|
|SLV||ISHARES SILVER TRUST||22.49||+0.07||+ 0.31%|
Goldman sees gold soar to $ 2,300 an ounce next year and silver hitting $ 30, which is good for gains of 19% each.
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|USO||UNITED STATES OIL FUND LP||29.27||+0.18||+ 0.62%|
West Texas Intermediate crude oil, meanwhile, is expected to rebound 36% to $ 55.90 a barrel. With stocks remaining high, the company believes prices will start to pick up “after the winter”.