Goldman Sachs expects commodities supercycle
Reuters
Published Mar 21, 2023 21:00
Updated Mar 22, 2023 03:00
By Julia Payne
LAUSANNE, Switzerland (Reuters) -Goldman Sachs expects a commodities supercycle driven by China and the capital flight from energy markets and investment this month after concerns triggered by the banking sector, the U.S. bank's head of commodities said.
"As losses mounted, it spilled into commodities," Jeff Currie, global head of commodities for Goldman Sachs (NYSE:GS), told the Financial Times Commodities Global Summit on Tuesday.
"Historically, when you have this kind of scarring event, it takes months to get capital back ... We will still get a deficit by June and it will drive oil prices higher."
Oil prices tanked to 15-month lows as a crisis at Switzerland's second-biggest bank Credit Suisse (SIX:CSGN), which followed the collapse of two U.S. lenders, led to a takeover by bigger Swiss rival UBS.
Currie emphasised the hit was to the supply side rather than demand and he remains very bullish on copper.
"The deposits have already left ...Cash is going into money markets not into the banks."
"On copper, the forward outlook is extraordinarily postive. We'll be at the lowest observable inventories that have ever been recorded at 125,000 tonnes. We have peak supply occuring in 2024...Near term we put (the copper price) at $10,500 and longer term our price target is $15,000 a tonne."
His remarks echoed those of major copper trader Trafigura which said the price could top $12,000. Copper hit a record high $10,845 in March 2022.
Currie added that concerns about the banking sector were centred around U.S. regional banks while Europe was relatively safe from contagion.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.