Monday, September 24, 2012

Goldman (GS) Sees Commodities Jumping 18 Percent

Over the next year, Goldman Sachs (NYSE: GS) said they see commodities providing a return of 18.2 percent, led by industrial metals and energy prices.

Interestingly, and I think wrongly, Goldman sees precious metals rising only six percent during the same period, as measured in Standard & Poor’s GSCI Enhanced Commodity Index.

Goldman Sachs analyst Jeffrey Currie said, “Apart from being attractive in its own right, we also continue to see an overweight in commodities as a hedge against the risk of the impact of sharply higher commodity prices on economic growth and other asset classes, if oil supplies were to disappoint against a backdrop of very limited spare capacity.”

As for other commodities, Goldman sees agriculture overall dropping by 5 percent over the next year, although it sees livestock climbing 4.5 percent.

For the year, expectations are the Standard & Poor’s GSCI Enhanced Commodity Index will jump 26.5 percent. For the next quarter Currie sees it up by about 8.6 percent.

Globally, these numbers are lower that projections of a 32.8 percent increase in the Tokyo Stock Exchange Topix and 25.5 percent boost in Stoxx equity index.

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