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 Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

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