Goldman's commodity forecast

Goldman Sachs predicts that interest rate cuts will benefit commodity prices this year, with raw material prices set to rise 15%. Commodities will rise this year as central banks in the U.S. and Europe begin cutting interest rates, helping to support industrial and consumer demand, according to Goldman Sachs. Raw materials could return 15% in 2024 as borrowing costs fall, manufacturing recovers and geopolitical risks persist, analysts including Samantha Dart and Daan Struyven said in a March 24 note. The bank stressed that investors should be selective as gains will not be universal, adding that copper, aluminum, gold and petroleum products could rise. Commodities made modest progress in the first quarter as crude oil strengthened, gold reached a record and copper surpassed $9,000 a ton. Policymakers at both the U.S. Federal Reserve and the European Central Bank have signaled their intention to lower borrowing costs this year as inflation eases. China also signaled more support for the recovery. “We have seen that in non-recessionary environments, U.S. rate cuts lead to higher commodity prices, with the biggest increases being in metals (particularly copper and gold) followed by crude oil,” the analysts said.