Goldman: Buy commodities, China irrelevant

Because this time “it’s different”. Last night witnessed some aggressive rebounds in commodity prices thanks, in part, to a new Goldman note assuaging rising concerns for commodity prices emanating from the imminent Chinese slowdown. There are some days when Wall Street really does take the cake.

Buy the China led dip. The bullish commodity thesis is neither about Chinese speculators nor Chinese demand growth. It is about scarcity and the DM-led recovery. Prices retraced 3% after Chinese warnings over onshore commodity speculation, yet the fundamental path in key commodities such as oil, copper and soy beans remains orientated towards incremental tightness in H2, with scant evidence of a supply response sufficient to derail this bull market.

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