GOLDMAN’S 2010 COMMODITY OUTLOOK

Despite the fact that Goldman Sachs isn’t exactly the most popular bank on Wall Street these days there is no denying the fact that their trading desk is a money machine.  Much of that is due to their spectacular trading in commodities.  In addition to their favorite trades for 2010 (see here for the full details) Goldman also recently released their outlook for commodities in the coming year.  Their outlook for a rather robust global economy is in-line with their continued bullish view of the commodity markets.  Easy money and stronger than expected demand should help to keep many of the recent trends alive.  Full details follow:

  • Oil: A slow developed markets recovery amid an emerging markets revolution

Price target: $90

Potential profit: 20%+

  • Natural gas: Lowering our forecast on the back of delayed production declines

Price target: $6

Potential profit: 4%

  • Base metals: Urbanization is broadly supportive but extraction generates
    differentiation

Price targets:

Copper – $8,100 mt

Potential profit: 15%+

  • Precious metals: US Fed on hold leaves gold room to run

Price target:

Gold ’10 – $1350

Potential profit: 20%+

Silver ’10 – $20

Potential profit: 15%+


  • Agriculture: It’s still all about weather, but ongoing structural demand shifts in
    corn should prove supportive

Price target:

Wheat – $600

Potential profit: 15%+

Corn – $475

Potential profit: 18%

  • Livestock: Economic recovery suggests rising meat demand amid tighter supplies

Pretty bullish.

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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • prescient11

    If you like gold find the junior miners you like and diversify. BBR.V is solid, as well as some others. RES.V gets you a gold and rare earth play together. That is the next position I probably will build.

    Juniors give you the true leverage.

    Well, GS’ forecast and the XTO sale lead me to only one natural conclusion, in the short term short the hell out of NG.

  • Richard

    GS….really do not have faith in them.

  • Eric Feuer

    Gold has no utility, save for some industrial electronics and commercial/retail jewelry (mostly in the mid east). However, most of the discovered gold in the world has been dug up out of the ground then placed back in the ground, in vaults where people pay armed guards to protect it around the clock, usually as it just sits there and collects dust. Due to gold’s utter lack of utility any valuation on it can not easily be accurately established, even by GS.