Goldman Sachs predicts commodities will surge as central banks in the U.S. and Europe plan interest rate cuts, boosting demand.
Analysts expect commodity prices to increase by 15% by 2024 due to lower borrowing costs, a revival in manufacturing, and ongoing geopolitical tensions.
They see significant gains for copper, gold, and petroleum products, although they recommend selective investment.
Commodities have already shown modest growth early this year, with increases in crude oil, record highs for gold, and copper prices exceeding $9,000 per ton.
This trend follows signals from the Federal Reserve and European Central Bank of upcoming rate cuts amid decreasing inflation.
China’s commitment to economic recovery also supports the commodities market.
Rate cuts in the U.S., particularly outside recession periods, historically elevate commodity prices, benefiting metals and crude oil.
Analysts expect this positive price impact to grow as financial conditions ease.
Other market analysts, including Macquarie Group Ltd., agree that commodities are entering a bullish cycle due to supply reductions and a global economic rebound.
Jeff Currie of Carlyle Group LP and JPMorgan Chase & Co. also foresee price increases, notably for gold, after the Federal Reserve’s rate cuts.
Goldman sets year-end forecasts for copper at $10,000 per ton, aluminum at $2,600 per ton, and gold at a record $2,300 an ounce.
Despite keeping interest rates unchanged recently, the Federal Reserve anticipates three cuts this year, presenting a complex outlook amid high inflation.
This situation highlights the interconnectedness of global finance, monetary policy, and commodity markets, promising a rewarding year for commodities.