Not new but worth repeating. From the SMH:
Iron ore, gold, soybeans and copper will probably drop at least 15 per cent next year as commodities face increased downside risks even as economic growth in the US accelerates, according to Goldman Sachs.
The risks are strongest for iron ore, and follow increases in supplies, analysts including Jeffrey Currie wrote in a report yesterday that identified the New York-based bank’s top 10 market themes for the coming year. Price pressures will mostly become visible later in 2014, the analysts wrote, forecasting that bullion, copper and soybeans will decline to the lowest levels since 2010.
Commodities as tracked by the Standard & Poor’s GSCI Index lost 5 per cent this year, led by declines in corn, as supplies surged, and precious metals, on expectations the Federal Reserve will taper stimulus. Goldman described the forecast losses for iron ore, gold, soybeans and copper as significant, and said that they could help weaken currencies in producing countries, including the Australian dollar and South African rand.
‘‘Last year, we pointed to the ongoing shift in our commodity views, ultimately towards downside price risk,’’ the analysts including Currie wrote. ‘‘The impact of supply responses to the period of extraordinary price pressure continues to flow through the system.’’
