Goldman Look For S&P GSCI Returns Of Over 30% In Next 12 Months

Goldman Sachs note that “carbon-related scarcity is further generating macro uncertainty – from increasing global interest rates to growing questions over green policy and the rising cost of living. With reduced Russian gas flows to Europe and China stimulating as it comes out of lockdown, this scarcity places macro markets under the influence of carbon-related commodities. As a result, until energy transition is driven by clear, consistent and globally coordinated policy, we believe carbon - as it appears in energy and food - is the perfect hedge against today’s macro environment. In our view, the strategic case to own commodities has rarely been a better. With commodity demand above supply, markets remain tight even as growth rates slow, as evidenced by the high level of prompt backwardation in key markets like oil, we estimate the carry alone will create 10.4% returns while we now forecast 31% returns in the S&P GSCI over the next 12 months.”