Goldman Thinks Commodities Will Outperform in 2025 // Bonds Into Year-End?
The Commodity Report #183
Goldman Thinks Commodities Will Outperform in 2025
Gold will rally to a record next year on central-bank buying and US interest rate cuts, according to Goldman Sachs - putting out a price target of $3.000 USD till end of 2025.
The bank sees a sideways market in crude as its base case. “In our baseline forecast, we continue to see oil prices as range-bound, with Brent likely to stay in a $70-$85/bbl range. Including the roll return, this means that energy and our broader commodity indices should offer modest positive returns in the central case.”
For farm goods, Goldman weighed the potential fallout from possible tit-for-trade trade measures between Washington and Beijing during Trump’s tenure. “Higher China tariffs on US agricultural goods and meat could reduce demand for US exports,” the analysts said. “Given insufficient alternative export markets, rebalancing the US market would require lower US soybean/corn/meat prices.”
Moreover the large investment bank continues to be bullish on the USD vs the Euro as well as it is expecting even higher treasury yields going into the year.
Bonds Into Year-End?
“CTAs have continuously been selling duration in the last eight weeks. Using the last two weeks as a consolidation period, CTAs appear ready to buy duration again, especially in Europe. Based on our flows simulation model, their reaction function is clearly skewed towards buying” UBS wrote in a research note during the week.
If you pair these comments with the typical seasonality of long-duration treasuries - here shown by Nautilus Research on the example of TLT - towards year-end this could work as a compelling setup.
The investment bank also updated its latest trades based on its CTA momentum models:
'Contrarian' trades: bullish Energy and Agriculturals, bearish Soybean Oil,Aluminium, Silver and Zinc
'Go with momentum' trades: bullish Cattle Feeder, Live Cattle and Coffee, bearish Lme Tin and Corn
In Other News…
This week, look out for the following:
ISM Manufacturing PMI on Monday
JOLTS Job Openings on Tuesday
ISM Services PMI on Wednesday
Job Market Report on Friday
Research Service
If you’re an institutional investor, check out our research products for commodity-related futures or equities here.
Till next Monday, Lukas
If you have any questions in the meantime, please feel free to contact me via X or Mail.