(Reuters) – A weaker U.S. greenback, rising inflation dangers and demand pushed by extra fiscal and financial stimulus from main central banks will spur a bull marketplace for commodities in 2021, Goldman Sachs stated on Thursday.
The financial institution forecast a return of 28% over a 12-month interval on the S&P/Goldman Sachs Commodity Index (GSCI), with a 17.9% return for treasured metals, 42.6% for vitality, 5.5% for industrial metals and a destructive return of 0.8% for agriculture.
Markets at the moment are more and more involved concerning the return of inflation, the Wall Avenue financial institution stated.
Expansionary fiscal and financial insurance policies in developed market economies proceed to drive rates of interest decrease and create demand for hedging the tail dangers of inflation, lifting demand for treasured metals, Goldman Sachs stated in a be aware.
Goldman forecast gold costs XAU= at a mean of $1,836 per ounce in 2020 and $2,300 per ounce in 2021, and expects silver costs XAG= to be at round $22 per ounce in 2020 and $30 per ounce subsequent 12 months.
Spot gold was buying and selling at $1,915.04 per ounce by 0527 GMT, whereas silver was at $24.85 per ounce.
Gold, extensively considered as a hedge in opposition to inflation and forex debasement, has gained 26% this 12 months, benefiting from unprecedented world stimulus and near-zero rates of interest.
Non-energy commodities might see an “speedy upside” because the market balances tighten forward of expectations on sturdy demand from China and weather-driven dangers, the Goldman Sachs analysts stated.
The financial institution maintained a “impartial” view on commodities within the close to time period and “chubby” within the medium time period.
Reporting by Brijesh Patel in Bengaluru; Enhancing by Amy Caren Daniel