U.S. investment bank Goldman Sachs (GS) is forecasting a commodities supercycle driven by demand in China and a flight of capital from the energy sector.
Oil prices have now fallen to a 15-month low as a global banking crisis rattles markets and raises concerns that a recession this year could hurt energy demand.
According to Goldman Sachs, money rushing out of the energy sector is likely to be funneled into commodities such as copper.
Specifically, Goldman Sachs says that copper will be at its lowest inventory level ever in 2024. As a result, the bank forecasts that the price of copper will reach $15,000 U.S. a tonne over the next year.
Copper’s price hit a record high of $10,845 U.S. in March 2022.
Other commodities, such as gold, are already rallying. The price of gold recently topped $2,000 U.S. an ounce for the first time in a year as investors shift money away from stocks.
Goldman Sachs’ own stock is down 9% over the last 12 months at $309.53 U.S. per share.
