The data so far in developed and emerging markets has renewed confidence in cyclical support for commodities this year, the bank said.
Within 12 months, the bank is targeting a 9%, 13% and 27% drop in cobalt ($26,000/t), nickel ($15,000/t) and lithium carbonate ($10,000/t), respectively.
Goldman Sachs maintained its positive long-term outlook for commodities in 2024, which have given a return of 9% so far this yearand are expected to rise further to 15% by the end of the year, due to support cyclical and structural to demandand geopolitical risks.
The bank forecast a return 20% in select sectors such as energy and industrial metals excluding nickel and zinc in the S&P GSCI Commodity Index by 2024as he wrote in a research note this Sunday.
Data so far in developed and emerging markets has renewed confidence in cyclical support for commodities this year, the bank said, adding that rate cuts in the United States and Europe starting in June this year are expected to support the demand and prices of basic products, particularly copper, aluminum and petroleum products.
Structural support for commodities remained intact, as evidenced by strong demand for green metals and oil product margins so far this yearwhile the role of commodity investment as a geopolitical hedge was still in play, as seen in the continued disruptions to Red Sea shipping and recent attacks on Russian refining capacity.
Commodity rally?
The bullish qualities of copper, such as the progressive shortage, especially starting in the second half of this year, rThey support the bank’s bullish objective of a 40% price increase in 12 months.
However, Goldman Sachs took a bearish view on commodities such as US natural gas, lithium, nickel and zinc. “We continue to recommend investors short the October 2024 Henry Hub,” the bank said. “Within industrial metals, the segment with the most bearish fundamentals remains battery materials…we believe it is too early to declare a decisive end to these respective bear markets.”
Within 12 months, the bank is targeting a 9%, 13% and 27% drop in cobalt ($26,000/t), nickel ($15,000/t) and lithium carbonate ($10,000/t), respectively.
Source: Ambito
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