Analysts at Goldman Sachs said in a note released on Thursday, massive fiscal and monetary stimulus deployed by governments and major central banks is likely to bode well for the commodities market in 2021.
Further, a broadly weaker US dollar and rising inflation risks could also collaborate with the bull market for commodities.
“The bank forecast a return of 28% over a 12-month period on the S&P/Goldman Sachs Commodity Index (GSCI), with a 17.9% return for precious metals, 42.6% for energy, 5.5% for industrial metals and a negative return of 0.8% for agriculture.”
“Goldman forecast gold prices at an average of $1,836 per ounce in 2020 and $2,300 per ounce in 2021, and expects silver prices to be at around $22 per ounce in 2020 and $30 per ounce next year.”
“Non-energy commodities could see an “immediate upside” as the market balances tighten ahead of expectations on strong demand from China and weather-driven risks.”