Goldman Sachs: Nickel and palladium rise in potential

Goldman Sachs believes that with the acceleration of global economic growth, the prospects for the supply of bulk commodities will be divided. Nickel and palladium will outperform iron ore and soybeans.

Bank analyst Jeffrey Currie et al. maintained their "neutral" commodity commodity recommendations for the next 12 months in a report released on Monday. These analysts expect that, thanks to positive rolling yields, the S&P Goldman Sachs Commodity Index rose 0.1% over the next 12 months.

Citibank said last month that commodities returned to asset class. The Industrial Bank of France believes that the performance of goods varies. The performance of raw materials has been shown to be very independent. The Indonesian export ban has prompted nickel prices to rise, while the global supply surplus has caused iron ore to enter a bear market.

Goldman Sachs analysts believe that rising demand for commodities will prompt a cyclical rebound, but prices are more determined by structural supply factors. Therefore, the global environment for improving macroeconomic data does not mean that all commodities will rise.

The S&P Goldman Sachs Commodity Index rose 2.3% this year, global stock markets rose 5.5%, and the US Treasury bond index rose 3.5%. Goldman Sachs stated that there is a supply gap for nickel, zinc and palladium, and that most commodities such as copper, iron ore, petroleum and soybeans are expected to oversupply.

Aakash Doshi, vice president of global marketing at Citigroup, once stated that since the beginning of this year, asset managers and some new players have stepped up the allocation of commodities, and geopolitics and weather are the main reasons.

Michael Haigh, Head of Commodity Research at Societe Generale, in turn, is optimistic about agricultural products and energy and is not very optimistic about precious metals.

Goldman Sachs believes that the financial market has responded positively to the accelerated improvement of the macroeconomic situation in China and the United States, and the S&P 500 has risen to a new high. However, the commodity index remained basically stable, and the oversupply of most of the raw materials is expected to suppress price increases. However, nickel, zinc and palladium are expected to be in short supply in the next three years and will not be constrained by the overall trend of commodities.

Morgan Stanley also predicts that nickel, zinc and palladium will rise. Nickel may rise excessively, but supply shortage will support its upward trend next year. The shortage of zinc will intensify and will continue to outperform the overall market. At the same time, strong supply and demand fundamentals will support the rise.