GS analyst remarks on commodities
The currrent recovery to "be the beginning of a much longer structural bull market for commodities"
GS cite 3 factors that will drive prices higher:
- 10 years prior has seen a lack of investment, leaving inadequate production capacity to meet a V-shaped, vaccine-driven demand recovery
- policies to address the impact of coronavirus are aimed at social need instead of financial stability - will "likely create cyclically stronger, more commodity-intensive economic growth that should create the elusive cyclical upswing in demand"
- commodities will benefit from revaluation and relation, with a rise in government spending, particularly in the US