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Goldman Sachs forecasts a structural bull market emerging for commodities in 2021- here is the breakdown of their analysis

Goldman Sachs forecasts a structural bull market emerging for commodities in 2021- here is the breakdown of their analysis

Wall Street's Famous Bull
Brendan McDermid/REUTERS




Structural under-investment, increased stimulus and the weakening dollar are the foundation for Goldman Sachs' bullish forecast, according to a research note published Thursday.




The Goldman analysts recommend a long position on its carbon-neutral commodity index for ESG investors.




Goldman increase their forecasts for soya and corn, leaving gold unchanged.




A Biden win in the November presidential election could give oil demand a short-term lift thanks to increased oversight for shale and stimulus-led demand.




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Goldman Sachs believes commodities are about to enter a structural bull market in 2021.The COVID-19 pandemic decimated supply of a number of key raw materials this year, and although demand is expected to recover to a certain extent, a growing preference among investors for "new economy" sectors, such as technology, and an intensifying focus on the threat of climate change has increased calls for a shift away from reliance on polluting, "old economy" areas.In a research note published Thursday, Goldman analysts outlined three macro trends that will create this bullish environment.Firstly, years of under-investment in "old economy" sectors means the potential pipeline of new supply, whether that is for crude oil, or copper, is much smaller than it might have been, had the pandemic struck sooner.
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