Goldman Sachs says commodities may be best asset class in 2023

  • Commodities News
Goldman Sachs says commodities may be best asset class in 2023
Credit: © Reuters.

By Alessandro Albano - 2022 was a year in which commodities were one of the few positive notes for investors. The same narrative could repeat itself during 2023, that is at least according to analysts at Goldman Sachs who estimate returns for the asset class could exceed 40%.

"Underinvestment in new capacity, a rebound in global growth, China’s reopening, and a slowing of Federal Reserve rate hikes will power gains," analysts including Jeffrey Currie said in a note dated Dec. 14.

According to Goldman Sachs, commodities are expected to return +43% in 2023, as measured by the S&P GSCI Total Return index. The investment bank also noted that the indicator returned +42% in 2021 and +23% in 2022 so far.

"While investors remain concerned with the 2023 growth outlook – a large driver of the latest sell-off – the global business cycle is far from over," the analysts said.

"The long-run state of the market is predictable as supply and technological trends are far more persistent, with all the conditions required for another spike present in 2023," they added.

"From a fundamental perspective, the setup for most commodities next year is more bullish than it has been at any point since we first highlighted the supercycle in October 2020,” Goldman analysts concluded.

(Translated from Italian)

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