Goldman Sachs, the standard-bearer for commodities, admitted it was wrong but maintained its bullish view
May 25, 2023
Goldman Sachs, known as the standard-bearer for commodities, said its forecasts for a sharp rise in raw materials prices so far this year had not been good, but came with a renewed forecast for a sharp rise. Commodity prices have fallen this year, with the Bloomberg Materials index falling nearly 10 percent this week to its lowest level since 2021. Much of the fall in energy and metals prices has been driven by fears that the US is heading for recession after the Federal Reserve aggressively raised interest rates to curb inflation. Goldman analysts believe the likely explanation for the fall in commodity prices is an unprecedented liquidation of inventories and positions. Against this backdrop, Goldman Sachs analysts expect commodities to recover sharply if recession fears prove overblown.