Goldman Sachs bearish on goldGold, iron ore, soybeans and copper will probably drop at least 15 percent next year as commodities face increased downside risks even as economic growth in the United States accelerates, according to Goldman Sachs Group.
The risks are strongest for iron ore and follow increases in supplies, analysts including Jeffrey Currie wrote in a report Wednesday that identified the New York-based bank’s top 10 market themes for the coming year.
Price pressures will mostly become visible later in 2014, the analysts wrote, forecasting that bullion, copper and soybeans will decline to the lowest levels since 2010.
Commodities tracked by Standard & Poor’s GSCI Index lost 5.2 percent this year, led by corn as supplies surged, and precious metals on expectations the Federal Reserve will taper stimulus.
Goldman described the forecast losses for iron ore, gold, soybeans and copper as significant, and said that they could help weaken currencies in producing countries, including the Australian dollar and South African rand.
Gold, which was at $1,246.30 an ounce on the Comex in Singapore, will drop $1,050 at the end of next year, Goldman said in the report, restating an earlier forecast. Currie said last month that gold is a “slam dunk” sell for next year as the U.S. economy extends its recovery.
Bullion is headed for the first drop since 2000 this year as investors cut holdings. Futures lost as much as 2.6 percent yesterday after the Fed signaled that tapering may start in the months ahead, according to minutes from its October meeting.
Soybeans are seen by Goldman at $9.50 a bushel by the end of 2014, from $12.785 in Chicago today, while corn will retreat to $3.75 a bushel from $4.255. Copper will drop to $6,200 a ton from $6,981 on the London Metal Exchange.