Adam Smigielski
Goldman Sachs’ commodities research team remains “selectively bullish” on assets such as copper (HG1:COM), gold (XAUUSD:CUR), and oil (CL1:COM), as the investment bank said demand growth remains in good standing.
“We remain selectively bullish commodities because 1) demand growth remains solid, 2) we see more structural upside in industrial metals and gold, and 3) oil’s geopolitical risk premium has shrunk. We expect commodity total returns to rise from 13% YTD to 18% by year-end,” Goldman Sachs said in an investor note on Thursday.
From the perspective of copper, the investment bank said that the commodity has the potential of an additional 15% upside to $12,000/t by year-end.
As for gold, Goldman Sachs predicts that the precious metal will climb another 14% to $2,700/oz by the end of 2024.
With regard to Brent oil prices, the financial institution said that it expects the price to stay in its $75/bbl to $90/bbl range, but still sees the value in net long oil positions from a geopolitical stance.
For investors that are further looking to track the commodities market they can look towards exchange-traded funds as a proxy to the underlying commodity. Outlined below are a handful of copper, gold, and oil ETFs that market participants can further analyze:
Copper ETFs: (CPER), (COPX), and (OTC:JJCTF)
Gold ETFs: (GLD), (GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), and (OUNZ).
Oil ETFs: (USO), (BNO), (UCO), (SCO), (USL), and (DBO).
Insight into Commodity Trends
Goldman Sachs’ positive outlook on commodities like copper, gold, and oil reflects a broader trend in the market towards increased demand and potential for price growth. This reflects a confidence in the global economic recovery post-pandemic and the ongoing infrastructure and development projects driving demand for these resources.
Considerations for Investors
Investors looking to capitalize on these trends in commodities may consider diversifying their portfolios with exposure to copper, gold, and oil through the suggested ETFs. These exchange-traded funds offer a convenient way to gain exposure to these assets without directly trading futures or physical commodities, providing a more accessible entry point for retail investors.
