Whatâs Going On Here?Goldman Sachs reckons precious metals like gold and silver could bring investors big gains in 2021, and theyâre not the only commodities the investment bank recommended stocking up on. What Does This Mean?Goldman Sachs is forecasting gains of 30% for commodities in the next twelve months, and there are a couple of reasons for that boom. For starters, there wonât be as much investment in oil extraction, which means less of the slippery elixir to go round and higher prices for whatever is available. For another thing, governments have been trying to recover from the economic impact of the pandemic by pumping money into infrastructure, which will involve a whole assortment of commodities. And letâs not forget that economies are being flooded with trillions of dollars in an effort to encourage consumers to spend their economy-boosting cash. Thatâs going to push up the price of goods and services, which is expected to lead to higher inflation. And seeing as thatâll erode the value of hard-earned savings, investments in âsafe havensâ like gold will start looking a lot more appealing. Why Should I Care?For markets: Not-so-heavy metals.
There are all sorts of commodities investors could pick from, but Goldman Sachs sees most near-term upside in so-called ânon-energy commoditiesâ like metals and some agricultural products. Of all of them, itâs keenest on gold and silver, which itâs expecting to rise by 20% over the next three months.
Zooming out: Warning: more election talk.
Goldman Sachs thinks the gains from commodities could be even higher if thereâs a Democratic win in the upcoming US elections. The investment bank thinks the partyâs proposed climate plan could boost demand for both copper and silver â the latter of which is used heavily in solar panels. In fact, Goldman Sachs has worked out that if the Democrats win and China follows through with bringing forward its (renewable targets, silver prices could be set to jump another 9% (tweet this). | 