Goldman sees 2012 upside in oil, gold, copper

Fri Jan 13, 2012 5:07pm IST

A shopkeeper takes a gold ring on display to show a customer inside a jewellery shop in Taipei April 26, 2011. REUTERS/Pichi Chuang/Files

A shopkeeper takes a gold ring on display to show a customer inside a jewellery shop in Taipei April 26, 2011.

Credit: Reuters/Pichi Chuang/Files

Related Topics

REUTERS - Goldman Sachs said it expected upside in prices of oil, gold and copper this year, citing greater supply risks and stronger fundamentals.

"We view gold and copper as providing the best value opportunities relative to our view of fundamentals in 2012," the investment bank said on Friday, citing remaining risks of substantial supply shortfalls.

Goldman said it continued to expect a rise in oil demand in excess of production capacity gain, despite the slowdown in global economic growth.

"In our view, it is only a matter of time before inventories and OPEC spare capacity become effectively exhausted, requiring higher oil prices to restrain demand, keeping it in line with available supply," it said.

The bank said it expected gold prices to continue to rise through 2012, reaching $1,940 per ounce in 12 months, due to the current low level of U.S. real interest rates.

"We expect US real interest rates to remain lower for longer, given our U.S. economics team's expectation for U.S. economic growth to remain slow through 2012," Goldman added.

Goldman kept its 12-month return forecast for the S&P GSCI Enhanced Commodity Index of 15 percent, and its overweight allocation to commodities remained unchanged.

In another note, investment bank Barclays Capital BARCBC.UL said more sanctions against Iran could push oil prices well into the $130-140 per barrel range.

"While the focus of the oil market is the potential closure of the Strait of Hormuz, sanctions can actually have a knock-on impact on underlying balances," it said.

(Reporting by Naveed Anjum and Naveen Arul in Bangalore;Editing by Clarence Fernandez)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Jan Dhan Yojana

REUTERS SHOWCASE

Moody's on Inflation

Moody's on Inflation

Persistent inflation hurting India's sovereign ratings - Moody's  Full Article 

GDP Preview

GDP Preview

Economy likely grew faster in June quarter: Reuters poll.  Full Article 

Asian Market

Asian Market

Shares edge up on steady Wall Street  Full Article 

Chance For Reform

Chance For Reform

India's coal crunch - a chance to revamp, reallocate and revive.  Full Article 

Road to IPO

Road to IPO

Mega-IPO to rekindle the 'bromance' behind Alibaba's rise  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage