Thursday, April 1, 2010

Goldman Sachs (NYSE:GS): Commodity 'Price Spikes'

Commodity prices to explode upward

Goldman Sachs (NYSE:GS) said commodities may be in for “violent price spikes” as increasing demand from emerging markets leads to significant shortages. The constraints on supply is the second factor leading to the conclusion from Goldman.

Contrary to alleged manipulation of markets by speculators, the commodity price increases coming up will be related to supply, demand and storage, not investors.

Major price movements in commodities are largely related to when commodity inventories are low. When they're readily available, commodity prices are more stable.

Goldman added there's no proof or evidence currency movements affect commodity prices.

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