2023-11-28:  Goldman Sachs is setting a bullish tone for commodities in 2024, projecting strong returns in the next 12 months. This optimism stems from a combination of factors including higher spot prices and a shift towards easing monetary policy. The financial giant anticipates a notable 21% return on commodities, with energy and industrial metals expected to be at the forefront of this upswing.

 

The bank's recommendation to go long on commodities in 2024 is bolstered by an improving cyclical backdrop and attractive carry returns. A key element in this forecast is the core disinflation trend, suggesting that further interest rate hikes may be off the table, thus potentially boosting demand for commodities.

 

A significant factor in this bullish outlook is the noticeable decline in oil inventories, primarily influenced by OPEC's strategic decisions. Moreover, the escalating demand for green metals, pivotal in the transition to cleaner energy, is expected to contribute to the upward trajectory in commodity prices.

Goldman Sachs also highlights energy and gold as effective hedges against potential negative supply shocks. With a persistent resilience in demand, a recovery in oil prices is anticipated.

 

Looking ahead, the bank foresees a tightening in the stocks of key metals like copper and aluminium, predicting that this will lead to an increase in their prices in the latter half of 2024. This outlook positions commodities as a potentially lucrative investment avenue in the coming year