CNBC: Goldman Expects Commodities to Rebound Next Year, Says Oil and Gold Prices are Extremely Attractive

Article by Sam Meredith on CNBC Financial

Goldman Sachs said Monday commodities could surge around 17 percent over the coming months, with a fast-approaching G-20 meeting cited as a potential launchpad for raw materials.

div > div.group > p:first-child" itemprop="cssSelector"> So far this month, oil prices have collapsed on intensifying oversupply concerns, metals have fallen amid worries over slowing economic growth and investors continue to fret about the ongoing trade war between the world's two largest economies.

"Given the size of dislocations in commodity pricing relative to fundamentals with oil now having joined metals in pricing below cost support, we believe commodities offer an extremely attractive entry point for longs in oil, gold and base," Analysts at Goldman Sachs said in a research report published Monday.

"Many of the political uncertainties weighing on commodity markets have a significant chance of being addressed in Buenos Aires," Analysts, including Jeffrey Currie, said in the report.

In listing its top ten trade ideas for 2019, Goldman said it anticipated a rebound for Brent crude as OPEC implements production cuts.

Gold

Meanwhile, gold prices rose slightly on Monday, as the U.S. dollar weakened and the future course for Britain's departure from the European Union provided support for the yellow metal.

"If U.S. growth slows down next year, as expected, gold would benefit from higher demand for defensive assets," Goldman said in the note.

The U.S. bank said market participants had already priced in 10 out of the 12 interest rate hikes it expects from the Federal Reserve, adding there may well be additional support in the form of central bank buying.

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