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Goldman is calling a bull market for commodities in 2021 on dollar moves and inflation risk – CNBC

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The bank sees upside ahead particularly in non-energy commodities like farming and metals, pointing out tightening up supply amid adverse weather condition conditions and greater demand from China. Deficits in products early in the business cycle signal that the market will likely continue to rebalance, as long as there isnt a complete collapse in demand, the experts wrote. Inflation issues and a weaker dollarMarkets are now progressively concerned about inflation returning as a result of historic fiscal spending and continued low interest rates, which the bank states will likely drive more investment in commodities in order to balance out that threat. Goldman anticipates the metal to average a price of $2,300 per ounce in 2021, up from its predicted average of $1,836 per ounce this year.A weaker dollar is likewise anticipated to assist drive products– since theyre traded in dollars, a weaker dollar equates into more pricey commodities.

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