Commodity prices have not bottomed yet — Goldman Sachs

Note* - All images used are for editorial and illustrative purposes only and may not originate from the original news provider or associated company.

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from any location or device.

Media Packs

Expand Your Reach With Our Customized Solutions Empowering Your Campaigns To Maximize Your Reach & Drive Real Results!

– Access the Media Pack Now

– Book a Conference Call

Leave Message for Us to Get Back

Related stories

Apple Invests $500mn in MP Materials to expand U.S. supply

In a recent move, technology giant Apple Invests $500mn...

Egypt and Saudi Arabia Exploring Mining Cooperation Options

The Egyptian minister of petroleum and mineral resources, Karem...

Steel Tariffs To Protect Domestic Steel Industry In Canada

Prime Minister Mark Carney of Canada on July 16,...

New Mining Law in Egypt to Shift EMRA Into Economic Entity

A new amendment to the mineral resources law in...

While commodities are mired in the worst slump in a generation and all the market wants to hear is that the worst is already over, O Goldman Sachs (NYSE:GS) warns prices may fall even further.

Unless demand picks up or more miners cut output, prices for raw materials are set to stay low for years, or worse, continue to drop, it said in a note on Thursday, FT.com reports (subs. required).

“We have been forecasting weak commodity returns since last fall, although the extent of this weakness has far exceeded our initial expectations,” the analysts wrote.

Oil, copper lead the pack

Crude oil and copper are unlikely to rebound because of excess supplies, Goldman predicts. Consequently, the bank is keeping its outlook for U.S. WTI crude oil at $45 a barrel and for Brent crude oil at $50 a barrel in 2016 due to oversupply. It forecasts gold to remain at $1,100 per ounce for the next three months, $1,050 an ounce for the next six months and $1,000 an ounce for the next 12 months.

Goldman Sachs also expects copper prices to fall to $4,800 a ton by the end of this year, and to $4,500 a ton by end-2016. Spot iron ore prices are expected to decline to $44 a ton next year and $40 a ton in 2017 from around $46 a ton now.

“We don’t believe that current prices present an appealing entry point to position for higher commodity returns, despite the perceived asymmetric risk-reward at low spot prices and post such weak returns,” the New York-based firm noted.

However, the bank said this should not disrupt the long-term strategic case for including commodities in asset allocation, adding that there are some hopeful signs of a recovery in the global business cycle beginning early next year.

Latest stories

Related stories

Apple Invests $500mn in MP Materials to expand U.S. supply

In a recent move, technology giant Apple Invests $500mn...

Egypt and Saudi Arabia Exploring Mining Cooperation Options

The Egyptian minister of petroleum and mineral resources, Karem...

Steel Tariffs To Protect Domestic Steel Industry In Canada

Prime Minister Mark Carney of Canada on July 16,...

New Mining Law in Egypt to Shift EMRA Into Economic Entity

A new amendment to the mineral resources law in...

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from any location or device.

Media Packs

Expand Your Reach With Our Customized Solutions Empowering Your Campaigns To Maximize Your Reach & Drive Real Results!

– Access the Media Pack Now

– Book a Conference Call

– Leave Message for Us to Get Back