Goldman Sachs ‘extremely bullish’ on commodities; repeats supercycle call

Goldman Sachs global head of commodities research Jeff Currie has revealed that the investment bank holds an ‘extremely bullish’ stance for the commodities market in 2022 and for the rest of the decade.

The institution is doubling down on its commodities supercycle call which it made at the beginning of last year, based on the onset of a clean industrial revolution reliant on a range of base metals and critical minerals.

In a Bloomberg Television interview, Currie said the new year has started against a backdrop that includes record dislocations in energy, metals and agriculture and significant amounts of money in the system.

“The best place to be right now, particularly given the Fed pivot, are commodities,” Currie said, referring to the US Federal Reserve’s decision to begin hiking interest rates later this year. “We think you’re going to see another year of out-performance of commodities and real assets more broadly.”

Currie highlighted potential tightness in the oil sector over the next three to six months, with it looking increasing unlikely that Iranian production will return to market later in the year.

The global Brent crude benchmark is currently trading around US$81 a barrel, but without Iranian exports the price could shoot up to $95 a barrel by the end of the year, according to Currie.