Goldman Forecasts Commodities as Top Asset Class for 2023

Commodities are likely to be the best performing asset class next year according to Goldman Sachs.

• Underinvestment in new capacity, a rebound in global growth, China’s reopening, and a slowing of Federal Reserve rate hikes will power gains, analysts including Jeffrey Currie said in a December 14 note.
• “While investors remain concerned with the 2023 growth outlook – a large driver of the latest sell-off – the global business cycle is far from over,” the note said.
• “The long-run state of the market is predictable as supply and technological trends are far more persistent, with all the conditions required for another spike present in 2023,” it added.
• “From a fundamental perspective, the setup for most commodities next year is more bullish than it has been at any point since we first highlighted the supercycle in October 2020,” it said.
• Commodities are expected to return +43% in 2023, as measured by the S&P GSCI Total Return Index, the bank said, noting that gauge the returned +42% in 2021 and +23% in 2022 so far.