Goldman Is Doubling Down on Its Bullish Commodity Call
- Bank sees persisting backwardation driving positive roll yield
- Raw materials to outperform other assest classes in long run
IHS Sees Brent in High $50s and High $60s Range for 2018
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Commodities will bring better returns than other assets in the long run, according to Goldman Sachs Group Inc.
Strong global demand growth across raw materials reinforces the case for owning them, the bank said in a Dec. 11 report, maintaining its 12-month overweight recommendation on commodities. Goldman sees returns of 7.5 percent in 2018, driven by a market structure known as backwardation that’ll lead to a positive roll yield -- when investors sell more-valuable, expiring contracts at the end of each month and buy less-expensive futures in order to maintain their exposure.