Source: Zhitong Finance
Goldman Sachs said that commodity prices will rise this year as the Federal Reserve and the European Central Bank will cut interest rates to help support industrial and consumer demand.
Goldman Sachs said that commodity prices will rise this year as the Federal Reserve and the European Central Bank will cut interest rates to help support industrial and consumer demand. Goldman Sachs expects copper to rise to 10,000 US dollars per ton, aluminum to 2,600 US dollars per ton, and gold to 2,300 US dollars per ounce by the end of the year.
Goldman Sachs analysts, including Samantha Dart and Daan Struyven, said in a March 24 report that raw material prices are likely to rise 15% in 2024 as borrowing costs fall, manufacturing recovers, and geopolitical risks persist. The bank said the prices of copper, aluminum, gold and petroleum products are likely to rise. The bank also emphasized that investors need to be selective because the rise is not a common phenomenon.
Commodity prices rose in the first quarter. Among them, crude oil prices strengthened, gold prices hit record highs, and copper prices surpassed 9,000 US dollars per ton. Policy makers at the Federal Reserve and the European Central Bank have hinted that they intend to lower borrowing costs this year as inflation recedes. Furthermore, China has indicated that it will further support economic recovery.
Analysts said, “We have found that lower interest rates in the US in a non-recession environment will cause commodity prices to rise, boosting metals (especially copper and gold) the most, followed by crude oil.” “Importantly, as the impetus for a more relaxed financial environment gradually becomes apparent, the positive impact on prices tends to increase over time.”
Goldman Sachs's cautiously optimistic outlook echoes the views of other market observers. Macquarie said earlier this month that commodity prices are entering a new round of cyclical rise, driven by tighter supply and an improvement in the global economy. Jeff Currie, a former head of commodity research at Goldman Sachs and currently working for Carlyle Investments Group, also predicted that commodity prices would rise as the Federal Reserve cuts interest rates. Furthermore, J.P. Morgan emphasized the upward potential of gold.