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Commodities will enter a bull market in 2021, Goldman Sachs predicts

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Commodities will enter a bull market in 2021, Goldman Sachs predicts Goldman Sachs said on Thursday that a weaker US dollar, rising inflationary risks and rising demand, driven by additional fiscal and monetary stimulus from major central banks, will drive […]

Commodities will enter a bull market in 2021, Goldman Sachs predicts

Goldman Sachs said on Thursday that a weaker US dollar, rising inflationary risks and rising demand, driven by additional fiscal and monetary stimulus from major central banks, will drive a commodity bull market in 2021..

The bank predicts a yield of 28% over a 12-month period for S&P / Goldman Sachs Commodity Index (GSCI) with 17.9% yield for precious metals, 42.6% for energy carriers, 5.5% for industrial metals and with a negative yield of 0.8% for agricultural products.

Markets are increasingly worried about the return of inflation.

Commodities will enter a bull market in 2021, Goldman Sachs predicts

Goldman Sachs said in a note that expansionary fiscal and monetary policies in advanced market economies continue to drive down interest rates and create demand to hedge inflation risks by boosting demand for precious metals..

Goldman predicts gold prices XAU = at an average of $ 1836 an ounce in 2020 and $ 2300 an ounce in 2021, and expects XAG = silver prices to be around $ 22 an ounce in 2020 and $ 30 per ounce next year.

Spot gold was trading at $ 1,915.04 an ounce by 05:27 GMT, while silver was at $ 24.85 an ounce..

Widely viewed as a hedge against inflation and currency depreciation, gold is up 26% this year thanks to unprecedented global stimulus and near-zero interest rates..

According to Goldman Sachs analysts, non-energy commodities demonstrate «very fast growth», as the market balance narrows, outstripping expectations of strong demand from China and the risks of weather.

Bank kept «neutral» look at commodities in the short term and «above the market» in the medium term.