MT Insider: Goldman Sachs Bearish on Agriculture, Overall Commodities To Remain Stable

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While volatility in the bond and equity markets has increased this past month as a result of QE concerns (which pushed the 10-year treasury yield to its highest level in 14 months), commodities have remained stable, according to a report out this morning by Goldman Sachs.

It is well known that the S&P GSCI index ( GSG ) has traded within a range of plus or minus 1.5% as of late. Putting it simply, commodities price current fundamentals (which have not changed) while financial markets price future fundamentals (which have changed).

As a result, Goldman expects the overall commodities sector to remain range-bound, with the exception of agriculture which is forecast to the downside in 2H (and the direction to be determined by weather conditions).

GSG 31.26 -0.14 -0.45

DBA 25.78 +0.04 +0.16

JJA 53.29 +0.46 +0.87



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: GSG

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